Wall Street Woes: Economic Shifts and Corporate Challenges
Wall Street's main indexes fell amid concerns over a less dovish Fed, affecting megacap stocks. McDonald's shares dropped due to an E. coli outbreak, while Coca-Cola maintained its profit forecast despite revenue struggles. Key tech stocks also faced declines, with markets reassessing interest-rate cuts.
Wall Street's main indexes took a hit on Wednesday as concerns over a potentially less dovish Federal Reserve drove Treasury yields upwards, putting pressure on megacap stocks. Shares of McDonald's slumped 4.7% following a deadly E. coli outbreak, while Coca-Cola dipped 2.3% despite sticking to its annual profit growth forecast.
The broader Consumer Discretionary sector dropped by 1.1% amid the market's reassessment of rate cuts in the face of strong economic data and the impending U.S. presidential election. Rate-sensitive tech giants like Nvidia and Apple saw declines, dragging down the Nasdaq by 1%. Michael O'Rourke, chief market strategist at JonesTrading, observed that the increased yields have been on an upward trajectory post-Federal Reserve meeting.
Boeing reported a quarterly loss of $6 billion due to a debilitating strike, with workers poised to vote on a new contract proposal. Meanwhile, Texas Instruments and AT&T bucked the trend with positive earnings results. The session saw a more extensive number of declining issues, with analysts switching focus to the approaching Fed's Beige Book for further insights.
(With inputs from agencies.)