US Equities snapped a two-day winning streak as treasury yields rallied

　　

U.S. equities traded lower over the course of yesterday’s trading. The Dow Jones Industrial Average slid 0.33% to close at 30423.81. The S&P 500 lost 0.67% to close at 3695.16. The tech-heavy Nasdaq Composite lost 0.85% to close at 10680.51. U.S. equities snapped a two-day winning streak as treasury yields rallied; however, the three major indices are still on track for a positive week.

U.S. treasuries rallied as recession fears mounted. The 10-year treasury yield soared past 4.1% and was last seen trading at 4.144%. The U.S. 2-year treasury yield, which has historically been viewed as an early indicator of the Fed interest rate target, is currently trading at above 4.5%.

Shares of ASML, one of the world’s most important companies in the semiconductor supply chain, jumped 6% on Wednesday as the company reported better-than-expected earnings. ASML reported 5.77 billion euros in revenue, beating analyst forecasts of 5.41 billion euros. ASML showed resilience in earnings despite a downtrend in the semiconductor sector.

EV giant, Tesla, reported adjusted earnings of $1.05 per share, beating analyst estimates of 99 cents per share. Tesla shares dropped 5% in extended trading, however, as revenue came in below analyst estimates at $21.45 billion. Tesla CEO, Elon Musk, has been critical of the pace of the Fed’s interest rate hike. When asked if Tesla is concerned about the impending recession, Elon Musk replied that Tesla would be “pedal to the metal come rain or shine.”

Main Pairs Movement

The Dollar index gained 0.81% over the course of yesterday’s trading. The soaring short-term U.S. treasury yield and souring market sentiment have both acted as tailwinds for Dollar bulls.

EURUSD dropped 0.82% over the course of yesterday’s trading. EU CPI came in at 9.9%, year over year, slightly more than the expected 10%; however, the 9.9% still marks a multi-decade high. Inflation continues to weigh on the Euro and the economic outlook of Europe.

GBPUSD dropped 0.9% over the course of yesterday’s trading. U.K. CPI came in at a red hot 10.1%, year over year, beating estimates of 10%; furthermore, the core inflation climbed to 6.5%.

Gold dropped 1.4% over the course of yesterday’s trading. The non-yielding metal snapped its two-day winning streak amid demand returning for the U.S. Greenback.

Economic Data

Currency	Data	Time (GMT + 8)	Forecast
AUD	Employment Change (Sep)	08:30	25.0K
CNY	PBoC Loan Prime Rate	09:15
EUR	EU Leaders Summit	18:00
USD	Initial Jobless Claims	20:30	230K
USD	Philadelphia Fed Manufacturing Index (Oct)	20:30	-5.0
USD	Existing Home Sales (Sep)	22:00	4.70M