Wall Street ends lower after midterm election, CPI in focus

  • Meta Platforms wins over decision to cut 11,000 jobs
  • Disney sees biggest one-day drop since 2001 after report
  • Indices: S&P 500 -2.08%, Nasdaq -2.48%, Dow -1.95%

Nov 9 (Reuters) – Wall Street closed sharply lower on Wednesday as Republican gains in the midterm elections looked more modest than some expected as investors also focused on upcoming inflation data that will provide clues to the severity of future interest rate hikes.

Major indexes added lower as Treasury yields rose further after a poor auction of 10-year notes by the US Treasury.

Republicans were still favored to take control of the House of Representatives, but key races were too close to be called, with better-than-expected performance by Democrats diminishing the prospect of a so-called red wave of Republican gains.

“What was really more expected in the market was a red wave,” said Jay Hatfield, CEO of Infrastructure Capital Management in New York. “I think we were in a unique situation where the more Republicans gained, the better the market would have been. At least there would have been a strong rally in some stocks, like defense and energy stocks.”

Feeling so hurtful, Walt Disney Co (DIS.N) fell 13% – its biggest one-day drop since 2001 – after the entertainment heavyweight reported more losses from its push into video streaming.

Tesla Inc. (TSLA.O) fell 7.2% to a two-year low after Chief Executive Elon Musk revealed on Tuesday night that he had sold $3.95 billion worth of shares in the electric vehicle maker days after closing the deal. $44 billion deal for Twitter Inc.

Clean energy stocks, which typically benefit under Democratic leadership, rose, with ETF Invesco Solar (TAN.P) up almost 1%.

Wednesday’s decline on Wall Street ended a three-day rally in which the S&P 500 gained nearly 3%.

With the election outcome still uncertain, investors turned to October inflation data due out Thursday, which could shed more light on the Fed easing its aggressive stance on interest rate hikes. interest.

“The CPI is one of the most important inputs into the inflation environment. You would be hard pressed to find many investors willing to put a big bet ahead of (the report),” said strategist Art Hogan. market leader. at B. Riley Financial.

Traders are divided on whether the Fed will raise rates by 50 basis points or 75 basis points in December, according to CME Group’s Fedwatch tool.

The S&P 500 fell 2.08% to end the session at 3,748.58 points.

The Nasdaq fell 2.48% to 10,353.18 points, while the Dow Jones Industrial Average fell 1.95% to 32,513.94 points.

Components of the S&P 500

Investors also raised concerns about the health of leading cryptocurrency exchange FTX after a deal to buy it fell through as biggest rival Binance said it was pulling out.

Meta Platforms Inc (META.O) jumped about 5% after Facebook’s parent company said it was cutting 13% of its workforce, or more than 11,000 employees, in one of the biggest tech layoffs this year.

Wendy’s Co. (WEN.O) rose 3% after the burger chain reported quarterly sales and profit above analysts’ estimates.

Declining stocks outnumber rising stocks in the S&P 500 (.AD.SPX) by a ratio of 11.9 to one.

The S&P 500 posted 10 new highs and 16 new lows; the Nasdaq recorded 69 new highs and 463 new lows.

Volume on U.S. exchanges was relatively light, with 11.6 billion shares traded, compared to an average of 11.8 billion shares over the previous 20 sessions.

Reporting by Noel Randewich in Oakland, California Additional reporting by Devik Jain, Bansari Mayur Kamdar and Amruta Khandekar in Bengaluru Editing by Arun Koyyur and Matthew Lewis

Our standards: The Thomson Reuters Trust Principles.

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