Market Pullback Update
The S&P 500 index experienced a pullback in October 2023, with the index closing at 4,193.80, down 2.20% from the previous month This decline continued the downward trend that started in August 2023, with the index falling 1.77%, followed by a more significant drop in September 2023, of 4.87%
The market pullback was attributed to various factors, including Q3 earnings reports and guidance, which were not as strong as hoped for . Although 77.5% of companies beat earnings expectations, the guidance didn't appear to be as robust, leading money managers to take some profits off the table .
Other factors contributing to the market pullback include high bond yields, with the 10-year Treasury yield flirting with 5% for the first time since 2007 .This surge in yields has contributed to one of the worst periods for bond market performance in history and has pressured equity markets .
The Federal Reserve's stance on interest rates also played a role in the market pullback. Although the Fed is expected to keep rates steady for now, investors remain uncertain about future rate hikes.The labor market has remained stubbornly resilient, and inflation rates are still above the Fed's 2% target, leaving the option of future rate hikes on the table .
Geopolitical tensions, including the Israel-Hamas war and ongoing conflicts between Russia and Ukraine, as well as growing tensions between the US and China, have also contributed to investor uncertainty and fear .
Some of the biggest tech companies, including Tesla, Meta Platforms, and Alphabet, reported mixed earnings results, with some falling short of expectations [4]. This has led to concerns about the outlook for Big Tech and has contributed to the market pullback.
The S&P 500 is down 2.9% for October, and on pace for its third negative month in a row, the longest losing streak since the start of the pandemic in 2020 [4].
Key Statistics
S&P 500: down 2.20% in October 2023
Dow Jones Industrial Average: down 1.36% in October 2023
S&P MidCap 400: down 5.42% in October 2023
S&P SmallCap 600: down 5.83% in October 2023
The S&P 500 is down 2.9% for October
