On April 19, U.S. stocks fell as investors grappled with mixed earnings reports and rising yields, raising concerns about the Federal Reserve's next move on interest rates. The Dow Jones Industrial Average fell by 0.4%, the S&P 500 by 0.4%, and the NASDAQ Composite by 0.6%.
Expectations of the Fed keeping rates higher for longer caused Treasury yields to rise, with futures traders anticipating a quarter percentage point increase when the central bank meets in May. Tesla (NASDAQ:TSLA) stock was down 2.6% before its earnings report, while shares of streaming giant Netflix (NASDAQ:NFLX) dropped 4% following a disappointing forecast for Q2 results.
Morgan Stanley (NYSE:MS) shares were down 1% despite beating expectations, as a downturn in deal-making across Wall Street weighed on its results. The investment bank couldn't shake off the downturn compared to a year ago.
As the Fed prepares to release its periodic Beige Book report later in the day, investors will be watching for clues about lending trends. It's the first report since March's banking sector turmoil, which could provide insights into the current economic conditions across the country.
Additionally, crude oil and gold futures were down by 2.4% and 0.7% respectively. The drop in oil prices came as a surprise as oil had been on the rise due to increasing demand amid the global economic recovery.
Mixed earnings reports and rising yields have led to a bearish sentiment in the U.S. stock market, and investors will be closely monitoring the Fed's upcoming decisions on interest rates.
