The S&P 500 struggled to find direction as increasing Treasury yields dampened risk sentiment, particularly impacting consumer and tech stocks. The index and other major indices experienced declines, reflecting the bearish sentiment. The rise in Treasury yields is driven by concerns that the Federal Reserve may need to raise interest rates to combat potential inflation, following positive economic data. The Commerce Department reported a 0.5% increase in durable goods orders, contrary to expectations of a decline.
Big tech stocks, except for Alphabet Inc., felt the pressure from rising rates, with Apple Inc. leading the downside with a decline of more than 1%. In contrast, Alphabet remained relatively stable. Meta Platforms Inc. also saw a 1% decline after unveiling its new Quest 3 virtual reality headset, priced at $499 and set to be available on October 10.
Cannabis stocks were also impacted by the broader market slide, despite progress in a bill seeking to grant cannabis-related companies access to banking services. The U.S. Senate Banking Committee voted in favor of advancing the SAFER Banking Act, which aims to ensure banking system access for legal cannabis companies. However, cannabis stocks, including Cronos Group Inc., SNDL Inc., and Tilray Inc., turned negative despite the potential for improved financial access. On the positive side, Costco Wholesale saw a rise of more than 1% after reporting better-than-expected fourth-quarter earnings, supported by improved margins. Analysts are optimistic about the company’s future growth prospects, including a possible membership fee increase and the potential for a special dividend.