US markets
US equities ended mixed after fluctuating around the flatline throughout the session on Monday. The bellwether S&P 500 dropped 0.2 percent, and the blue-chip Dow Jones Industrial Average slipped 0.6 percent. However, a decline in Treasury yields provided some support to rate-sensitive growth stocks, with the tech-heavy NASDAQ closing up 0.3 percent. Investors remained cautious ahead of an eventful week filled with earnings reports and economic data.
Most of the S&P sectors ended in negative territory, with energy, materials, and real estate posting the biggest losses, while communication services, information technology, and consumer discretionary were the rare gainers. Among individual stocks, pharmacy chain operator Walgreens Boots Alliance jumped 3.3 percent on a rating upgrade to “overweight” from “neutral” by JP Morgan. Energy and chemicals operator Chevron slid 3.7 percent as the company said it would buy smaller rival Hess, down 1.1 percent, in a US$53 billion all-stock deal. Intel shed 3.1 percent on news that peers NVIDIA, up 3.8 percent, and Advanced Micro Devices, up 4.9 percent, were teaming up to make Arm-based chips for laptops. On the corporate earnings front, agricultural sciences firm FMC sank 13.2 percent after cutting its third-quarter forecasts.
Investors shifted their focus to earnings reports due this week for mega-caps including Microsoft, Alphabet, Meta Platforms, and Amazon.com. Focus this week will also be on incoming data, including the third-quarter gross domestic product (GDP) figures scheduled to be released on Thursday and the Personal Consumption Expenditures (PCE) report due on Friday.
These price data reflect observations at market close: WTI spot crude oil dropped by US$1.82 to US$86.24 while spot gold fell by US$16.40 to US$1,977.45. The US dollar fell vs. most major currencies. The US Treasury 30-year bond yield fell by 10 basis points to 4.99 percent while the 10-year note yield fell by 9 basis points to 4.84 percent.
European markets
European markets finished mixed on Monday. Still, higher bond yields and geopolitical tensions in the Middle East kept sentiment under pressure. The Europe-wide STOXX edged down 0.1 percent, the UK FTSE 100 slipped 0.4 percent, while the French CAC added 0.5 percent and the German DAX ended marginally higher.
Among the Europe-wide STOXX sectors, energy, real estate, and materials fell the most, while consumer discretionary, industrials, and consumer staples held up best. Energy stocks led the decline as oil prices fell further. Diplomatic efforts to keep the Israel-Hamas clashes from expanding to a wider conflict in the Middle East eased some concerns about supply disruptions in the oil-producing region. Sector majors BP, Equinor, and TotalEnergies lost between 0.4 percent and 2.4 percent. Mining stocks also took a hard hit as prices of most base metals fell amid concerns over geopolitical tensions, with major miners Antofagasta, Anglo American, and Glencore sliding between 1.4 percent and 2.0 percent. Among individual stocks, Volkswagen lost 0.9 percent after the carmaker cut its profit margin outlook for the current year on Friday. Health technology company Philips jumped 2.0 percent after it raised full-year guidance following its third-quarter core profit and comparable sales beating market expectations.
Asia Pacific markets
Asian equities continued their downward trend on Monday. Market volatility remained as the ongoing conflict in the Middle East compounded uncertainty about the outlook for global interest rates.
Mainland China’s equities extended losses for a fourth straight session. The CSI 300 dropped 1.0 percent, and the Shanghai index slid 1.5 percent. Hopes of more policy support faded as China’s economy showed signs of stabilizing. In corporate headlines, shares of Foxconn Industrial Internet tumbled 10.0 percent after its parent company, a major supplier of Apple’s iPhones, was reportedly subjected to tax audits and land use probes. The Hong Kong market was closed for a public holiday.
Japanese equities logged a third day of declines. Worries of the intensifying military conflict in the Middle East dented market sentiment. Uncertainty over whether the Bank of Japan will revise its ultra-easy monetary policy next week also kept investors on edge. The Nikkei index slid 0.8 percent, while the broader TOPIX dropped 0.7 percent. Heavy losses were witnessed among oil and coal producers, mining, as well as iron and steel companies. Resource stocks were weighed down by retreating crude oil prices. Semiconductor-related shares tracked their US peers lower as long-term Treasury yields remained near 16-year highs. Chip-testing equipment manufacturer Advantest and chipmaker Renesas Electronics lost 3.0 percent and 2.7 percent, respectively.
Taiwan’s TAIEX sank 1.2 percent. South Korea’s KOSPI slipped 0.8 percent. Indian equities fell for a fourth consecutive session, with the BSE Sensex down 1.3 percent, hitting a four-month low. Although domestic macroeconomic fundamentals remained strong, rising US Treasury yields, surging oil prices, and geopolitical tensions in the Middle East weighed on market sentiment.
Australian shares fell for a third session in a row, with the All Ordinaries index down 0.8 percent. Worries of a wider confrontation in the Middle East kept sentiment in check, while investors cautiously awaited domestic inflation data for September. Energy stocks led the losses as oil prices pulled back from a recent surge, spurred by the Middle East conflict. Sector majors Woodside Energy Group and Santos dropped 3.2 percent and 2.5 percent, respectively. Mining stocks finished lower due to demand concerns stemming from the weak Chinese property market. Miners BHP Group and Rio Tinto fell 2.4 percent each. Financial stocks declined, with the country’s four largest banks sliding between 0.1 percent and 0.9 percent.