Treasury Yields Rise, Tesla Jumps On Cheaper Model Pledge, Yen Plummets To 34-Year Lows: What's Driving Markets Wednesday?

Rising Treasury yields have investors cautious despite positive news from the earnings season.

The yield on the long-dated 30-year Treasury bond has surged to 4.79%. It’s on track to close at the highest level since early November, ahead of crucial economic data on Thursday.

The iShares 20+ Year Treasury Bond ETF TLT fell 0.9%, extending its year-to-date drop to 10%.

Rising yields are propelling the greenback higher, particularly against the low-yielding Japanese yen which tumbled to past 155 per dollar, hitting the lowest level since June 1990.

Tesla Inc. posted lower-than-expected results last quarter, but shares rose 10%. Investors reacted to the automaker’s pledge to produce more affordable models to broaden the market.

The S&P 500 fell 0.4% by midday trading in New York; the tech-heavy Nasdaq 100 managed to hold steady; and small caps saw wider declines, with the iShares Russell 2000 ETF IWM down 1%.

Gold remains unchanged, while oil prices edged up by 0.5%, despite the Energy Information Administration revealing a 6.368 million barrel drop in crude oil inventories last week, significantly below market expectations of a 1.6 million barrel increase.

Bitcoin BTC/USD fell 2.7% to $64,500 amid waning sentiment towards riskier assets.

Wednesday’s Performance In Major US Indices, ETFs

The SPDR S&P 500 ETF Trust SPY fell 0.5% to $503.45, the SPDR Dow Jones Industrial Average DIA fell 0.4% to $383.43 and the tech-heavy Invesco QQQ Trust QQQ inched 0.1% lower to $424.43, according to Benzinga Pro data. 

Sector-wise, the Consumer Discretionary Select Sector SPDR Fund XLY outperformed, up 0.3%. The Industrials Select Sector SPDR Fund XLI was the major laggard, down 1.5%.

Wednesday’s Stock Movers

• Texas Instruments Inc. TXN rose 6.5%, after beating both earnings and revenue estimates last quarter.
• Other companies reacting to earnings were Steel Dynamics, Inc. STLD (down 2.5%), Mattel, Inc. MAT (up 3.6%), Baker Hughes Company BKR (down nearly 2%), Chubb Ltd. CB, (down over 3%), Old Dominion Freight Line, Inc. ODFL (down over 10%), Norfolk Southern Corporation NSC (down 5%), Boston Scientific Corporation BSX (up over 6%), AT&T Corp. T (up 1.8%), Boeing Co. BA (down 1.6%), CME Group Inc. CME (down 1.4%), General Dynamics Corp. GD (down 3.2%) and Hilton Worldwide Holdings Inc. HLT (up 4.3%).
• Notable names reporting after the close are Whirlpool Corporation WHR, Western Union Company WU, ServiceNow, Inc. NOW, QuantumScape Corporation QS, O’Reilly Automotive, Inc. ORLY, Meta Platforms, Meritage Homes Corporation MTH, Lam Research Corp. LRCX, Knight-Swift Transportation Holdings Inc. KNX, International Business Machines Corp. IBM, Ford Motor Co. F and Chipotle Mexican Grill, Inc. CMG.

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