- Meta Platforms wins with decision to cut 11,000 jobs
- Disney falls as streaming unit losses mount
Nov 9 (Reuters) – Wall Street closed lower on Wednesday as Republican gains in the midterm elections looked more modest than some had expected, and investors also focused on upcoming inflation data that will provide clues about the severity of future interest rate hikes.
Major indexes added to the declines as Treasury yields rose further after a poor auction of 10-year US Treasuries.
Republicans were still favored to win control of the House of Representatives, but key races were too close to call, with a better-than-expected showing by Democrats reducing the prospect of a so-called red wave of Republican gains.
“What the market was really expecting was a red wave,” said Jay Hatfield, managing director of Infrastructure Capital Management in New York. “I think we were in a unique situation where the more the Republicans won, the better the market would have been. At least there would have been some stocks that recovered strongly, like defense and energy stocks.”
Also hurting sentiment, Walt Disney Co ( DIS.N ) fell after the entertainment heavyweight reported further losses from its push into streaming video.
Tesla Inc ( TSLA.O ) fell to a two-year low after Chief Executive Elon Musk disclosed late on Tuesday that he sold $3.95 billion of shares in the electric vehicle maker days after closing the deal of $44 billion for Twitter Inc.
Clean energy stocks, which typically benefit under Democratic leadership, rose, with the Invesco Solar ETF ( TAN.P ) on the day.
Wednesday’s decline on Wall Street ended a three-day rally in which the S&P 500 had gained nearly 3%.
With the outcome of the election still uncertain, investors were turning their attention to October inflation data due on Thursday, which could shed more light on whether the Fed might soften its aggressive stance on rate hikes of interest
“The CPI is one of the most important inputs in terms of the inflation environment. You’d be hard-pressed to find many investors willing to make a big bet on (the report),” said Art Hogan, chief market strategist . at B. Riley Financial.
Traders are split on whether the Fed will raise rates by 50 basis points or 75 basis points in December, according to the CME Group’s Fedwatch tool.
According to preliminary data, the S&P 500 (.SPX) lost 78.91 points, or 2.06%, to end at 3,749.20, while the Nasdaq Composite (.IXIC) lost 263.02 points, or a 2.46%, up to 10,354.54. The Dow Jones Industrial Average (.DJI) fell 644.15 points, or 1.94%, to 32,516.68.
S&P 500 Components
Investors also worried about the health of major cryptocurrency exchange FTX, with some wondering whether a bailout deal for larger rival Binance would materialize, while the company was reportedly part of a regulatory investigation.
Meta Platforms Inc ( META.O ) jumped after the parent of Facebook 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 ) bounced back after the burger chain reported quarterly sales and profit that beat analysts’ estimates.
Reporting by Noel Randewich in Oakland, Calif. Additional reporting by Devik Jain, Bansari Mayur Kamdar and Amruta Khandekar in Bengaluru Editing by Arun Koyur and Matthew Lewis
Our standards: the Thomson Reuters Trust Principles.