The ASX200 is projected to drop by 0.75% on Friday, reflecting a significant downturn in major US indices on Thursday. The market turbulence was triggered by Tesla (NASDAQ:TSLA)'s failure to meet Wall Street's Q3 expectations and escalating Treasury yields, which reached a 16-year high. The Federal Reserve Chairman, Jerome Powell, in his speech at the Economic Club of New York, hinted at further increases in the interest rate due to concerns about high inflation.
Despite the gloomy outlook, Netflix (NASDAQ:NFLX)'s stock rose over 16% due to nine million new Q3 users and American Airlines (NASDAQ:AAL)' upbeat quarterly results. However, Tesla's shares plunged nearly 10% after its third quarter results missed Wall Street estimates. This led to widespread sectoral declines, including a 2.4% drop in the real estate sector, and losses in major indices like the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite.
Powell's monetary policy discussion exacerbated investor fears of persistent high interest rates. He underscored the bank's determination to hit a 2% inflation target by closely observing data reflecting economic resilience and labor demand. This might necessitate sustained high-interest rates. Despite unemployment benefits hitting a nine-month low, indicating strength in the labor market, investor uncertainty remains high as reflected by the Market Volatility Index reaching its highest level since March.
On the other hand, the Reserve Bank of Australia faces a $43 billion deficit from COVID-19 stimulus measures, inciting debate over who should cover the bailout. Furthermore, releases of Japan's CPI data and UK retail sales figures are imminent.
Other notable stocks featured on Yahoo Finance include AT&T (NYSE:T) and Nokia (NYSE:NOK). The Yahoo Finance Live lineup for today features Kevin Nicholson of RiverFront Global Fixed Income; First American's Mark Fleming; Michael J. Wolf from Activate Consulting; Patrick Gadson of Vinson & Elkins' Shareholder Activism Practice; and Double Verify's Mark Zagorski. Oliver Pursche from Wealthspire Advisors noted that the rising Treasury yields were pressuring equities in the short term.
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