US stocks lose ground, gold resumes its climb as risk appetite sours
NEW YORK :Wall Street stocks closed sharply lower on Tuesday, extending a selloff prompted in part by the run-up to Nvidia earnings, which could test the artificial intelligence boom amid mounting valuation concerns.
All three major U.S. stock indexes ended deep in negative territory, with crude, bitcoin and gold advancing and U.S. Treasury yields dipping as investor risk appetite soured. The S&P 500 and the Dow logged their fourth consecutive daily losses, during which the bellwether S&P 500 has fallen 3.4 per cent.
Chipmaker Nvidia's quarterly results, expected on Wednesday, will be scrutinized for signs that the AI juggernaut, which has provided the muscle for much of the stock market's recent rally, has staying power or whether the fervor surrounding the technology has created a bubble.
In other earnings, home improvement retailer Home Depot forecast a steeper than expected drop in annual profit, raising concerns about the housing market and the health of the American consumer.
"Investors are sensing that the tenor of the market has shifted," said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana. "They don't necessarily want to be too bullish on tech in case Nvidia doesn't hit the ball out of the park."
"We're getting toward the end of a pretty good year, especially if you were a tech investor, and now you're starting to see a bit of a pullback," Carlson added. "(Investors) want to make sure that they protect their gains."
Official economic indicators that were unavailable during the longest government shutdown in U.S. history are being released, with the Commerce Department's August report of new orders for U.S. factory-made goods gaining 1.4 per cent as expected.
WORLDWIDE SELLOFF DEEPENS
The Dow Jones Industrial Average fell 498.56 points, or 1.07 per cent, to 46,091.68, the S&P 500 fell 55.08 points, or 0.83 per cent, to 6,617.33 and the Nasdaq Composite fell 275.23 points, or 1.21 per cent, to 22,432.85.
European shares closed at a one-month low, with German stocks hitting a near five-month low as risk appetite continued to sour due to worries over tech valuations and dimming hopes for a December rate cut from the U.S. Federal Reserve.
MSCI's gauge of stocks across the globe fell 11.64 points, or 1.18 per cent, to 976.17.
The pan-European STOXX 600 index fell 1.72 per cent, while Europe's broad FTSEurofirst 300 index fell 39.04 points, or 1.71 per cent.
Emerging market stocks fell 24.29 points, or 1.75 per cent, to 1,363.56. MSCI's broadest index of Asia-Pacific shares outside Japan closed lower by 1.9 per cent, to 701.18, while Japan's Nikkei fell 1,620.93 points, or 3.22 per cent, to 48,702.98.
U.S. Treasury yields fell as falling stock markets bolstered safe-haven demand.
The yield on benchmark U.S. 10-year notes fell 1.4 basis points to 4.119 per cent, from 4.133 per cent late on Monday.
The 30-year bond yield rose 0.5 basis points to 4.7408 per cent from 4.736 per cent late on Monday.
The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, fell 3.5 basis points to 3.575 per cent, from 3.61 per cent late on Monday.
DOLLAR STEADIES, CRYPTO REBOUNDS, GOLD GAINS
The dollar held gains against the yen after reaching a fresh 9-1/2-month high, and edged up versus the euro as investors contended with jitters over Japan's fiscal policy and scoured data for signals on the Federal Reserve's next move.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.05 per cent to 99.60, with the euro down 0.09 per cent at $1.1579.
Against the Japanese yen, the dollar strengthened 0.18 per cent to 155.52.
Bitcoin reversed course, gaining 0.99 per cent to $92,715.39 after dipping below $90,000, nearly 30 per cent below its peak. Ethereum rose 3.69 per cent to $3,116.25.
Crude prices turned higher as investors assessed the impact of sanctions on Russian oil.
U.S. crude gained 1.39 per cent to settle at $60.74 per barrel, while Brent settled at $64.89 per barrel, up 1.07 per cent on the day.
Gold reversed its slide, turning losses to gains after touching a one-week low.
Spot gold rose 0.64 per cent to $4,070.25 an ounce. U.S. gold futures fell 0.12 per cent to $4,063.40 an ounce.
