Nasdaq falls ahead of earnings, economic data while oil rallies

On October 12, the technology-heavy Nasdaq composite fell as oil prices surged nearly US$2 per barrel following attacks on a Saudi airport, and investors awaited bank earnings and economic data this week. The S&P 500 ended slightly lower, while the Dow Jones Industrial Average rose. Oil prices jumped after deadly strikes on Riyadh's international airport, overshadowing increased supply prospects mentioned by US President Donald Trump.

In the coming days, US investors will focus on corporate earnings, particularly from major US banks such as Goldman Sachs, Citigroup, and JPMorgan Chase, which reported early on October 13. Analysts anticipated S&P 500 earnings to surge 30.6% in the third quarter, based on LSEG IBES data. However, US Treasury market investors were concerned as bond yields reached 24-year highs, driven by high energy prices stoking inflation worries.

Tim Ghriskey, a senior portfolio strategist, noted that investors were cautious due to a lack of direction from bonds and the pending economic reports. With oil prices rising, energy outperformed the S&P 500's major industries with a 1.5% advance. The consumer staples and communication services sectors rose, while technology, consumer discretionary, and chip stocks lagged.

Microsoft's market capitalization surpassed US$4 trillion after announcing plans for major AI chip deployment, while Starbucks' stock rose 1.7% following a price hike for Chipotle Mexican Grill. Cleveland Federal Reserve President Beth Hammack suggested a more restrictive monetary policy stance to combat inflation, with traders pricing a 22% chance of a US Federal Reserve rate hike this month.