US Market Developments
At the close, the Dow Jones index lost more than 200 points, falling 0.60% to 38,763.45 points. The S&P 500 index fell 0.77% to 5,199.50 points, and the Nasdaq index fell 1.03% to 16,198.86 points.
Following the selling pressure experienced in the markets at the beginning of the week, the indices, which followed an upward trend yesterday and today, turned their direction into a negative trend again with the demand in the 10-year bond auction falling short of expectations. Analysts state that the weak demand in the bond auction caused anxiety among investors and the decline in the stock market revealed the fragility of the recovery following the historic selling wave.
The “dovish” messages given by officials of the US Federal Reserve (Fed) and the Bank of Japan (BoJ) were effective in the short-term recovery in the markets.
‘We will not raise interest rates while financial markets are unstable’
Chicago Fed President Austan Goolsbee said on Monday that the employment data released last week in the US was weaker than expected but did not indicate a recession. BOJ Vice President Shinichi Uchida said today, drawing attention to the sharp fluctuations in financial markets, “We will not raise interest rates while financial markets are unstable.”
With these developments, the US 10-year bond yield, which saw its lowest level since June 2023 on Monday, continued to rise, increasing by about 6 basis points to 3.95%.
Companies Are Losing Value
Meanwhile, as corporate balance sheets have returned to investors’ focus, some major companies have seen significant declines in their stocks. For example, Disney’s stock fell 4.5% after the company’s financial results beat expectations but operating income from its parks division declined. Amgen’s stock fell 5% after the company’s earnings missed expectations.
Super Micro Computer shares fell 20.1% after the company reported lower-than-expected profits. Airbnb shares fell 13.4% after disappointing second-quarter financials and warnings of slowing demand from US customers. Meanwhile, Shopify shares rose 17.8% after the company reported higher-than-expected profits.
Analysts say that the data on unemployment benefits applications to be announced tomorrow in the US will be followed carefully and that this data could provide more information about the state of the labor market.
