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US stocks gave up all of their gains for October as a sell-off in tech heavyweights on Thursday produced Wall Street’s worst daily drop in almost two months.
In the final trading session of the month, the S&P 500 ended down 1.9 per cent while the tech-heavy Nasdaq Composite closed 2.8 per cent lower.
Big Tech stocks led the losses, with Microsoft dropping 6 per cent — its biggest one-day drop in two years — after its quarterly earnings outlook disappointed. Facebook parent Meta, which also reported on Wednesday, slid 4.1 per cent.
The market stumble came ahead of earnings reports from two other trillion-dollar tech groups, Apple and Amazon. The pair closed down 2 per cent and 3.4 per cent respectively, with the iPhone maker recovering some of its losses for the day and Amazon erasing them after their announcements.
The moves in the S&P 500 and Nasdaq, which marked the biggest daily drops for the indices since September 6, left them down 1 per cent and 0.6 per cent, respectively, for the month.
The October decline broke a five-month winning streak for the S&P 500, during which time US stocks had reached record highs on a combination of expectations that the Federal Reserve would begin to ease monetary policy and data signalling the economy was on course for a “soft landing”.
After Thursday’s slide, the S&P 500 and Nasdaq stood about 2.5 per cent and 3 per cent respectively below their peaks.
The market moves come just days before Tuesday’s US presidential election, when Kamala Harris and Donald Trump have vied to convince voters that they offer better stewardship of the economy and in turn a better outcome for markets.
Investor jitters have been rising as the election has neared and the prospect of next week’s Fed meeting has added to general tensions. Treasury yields and the dollar have risen to their highest levels in about three months.
The yield on the policy-sensitive two-year Treasury edged up to 4.16 per cent, leaving it up 0.52 percentage points and on course for its biggest monthly increase since February 2023.
The yield on the benchmark 10-year Treasury was on track to register its biggest monthly rise since September 2022, with a 0.5 percentage point increase to about 4.28 per cent.
The dollar, measured against a basket of six major currencies, has gained 3.3 per cent in October and was on track for its biggest monthly advance since April 2022.
