Wall Street Volatility Continues as Investors Await Fed Meeting and Assess Earnings Reports

Other major growth stocks, including Meta Platforms (META.O) and Microsoft (MSFT.O), also saw modest declines ranging from 0.4% to 1%.

On Tuesday, Wall Street experienced a volatile trading session as investors awaited the Federal Reserve’s upcoming monetary policy meeting and digested various corporate earnings reports and economic indicators.

The main stock indexes exhibited some fluctuations during the day.

One notable decline came from Nvidia (NVDA.O), which dropped by 3.7% due to concerns that U.S. restrictions could lead the chip designer to cancel significant orders to China.

Other major growth stocks, including Meta Platforms (META.O) and Microsoft (MSFT.O), also saw modest declines ranging from 0.4% to 1%.

Among the S&P 500 sectors, six out of eleven were in the red, with the information technology sector (.SPLRCT) leading the losses.

Earnings reports played a role in the market movement, with heavy-machinery manufacturer Caterpillar (CAT.N) experiencing a 6.3% decline as its dealer inventories rose and a large order backlog shrank, indicating a potential slowdown in equipment demand.

Additionally, drugmaker Amgen (AMGN.O) slipped 4.3% after releasing its third-quarter results, and Pfizer’s shares (PFE.N) fell 1.5% following its first quarterly loss since 2019.

Economic data also influenced sentiment, with the Chicago PMI reading for October coming in at 44, just below expectations of 45.

Meanwhile, a separate report showed solid increases in U.S. labor costs for the third quarter.

Despite some concerning indicators, there was a sense of cautious optimism. Andrew Hunter, Deputy Chief U.S. Economist at Capital Economics, noted, “The slightly stronger increase in the employment cost index in the third quarter is another sign that the earlier rapid easing in labor market conditions may be fading.

But the forward-looking evidence still suggests wage growth will slow further over the coming months.”

U.S. equities were on track for their third consecutive month in the red, with both the S&P 500 (.SPX) and the Nasdaq (.IXIC) facing their worst October performance since 2018.

The Federal Reserve commenced a two-day monetary policy meeting on Tuesday, with expectations that the central bank would maintain interest rates at their current levels, as indicated by the CME Group’s FedWatch tool.

Investors were keenly awaiting the Fed’s commentary on Wednesday to gain insights into how long the monetary policy might remain restrictive in light of recent signs of economic strength.

In addition to earnings and the Fed meeting, attention was focused on labor market data throughout the week, culminating in Friday’s non-farm payrolls report, which would provide further clues about the strength of the U.S. economy.

As of 9:46 a.m. ET, the Dow Jones Industrial Average (.DJI) was down 92.67 points, the S&P 500 (.SPX) was down 5.35 points, and the Nasdaq Composite (.IXIC) was down 57.94 points.

There were notable stock movements, such as Pinterest (PINS.N) surging by 14.8% after surpassing third-quarter revenue and profit expectations, and U.S.-listed shares of Chinese companies, including JD.Com, Alibaba, PDD Holdings (PDD.O), and Bilibili, declining by 1.5% to 2.4% following unexpected contraction in China’s manufacturing activity for October.

VF Corp (VFC.N) dropped 6.7% as the Vans sneaker maker withdrew its annual forecast, while cloud solutions provider Arista Networks (ANET.N) gained 8.5% on a positive fourth-quarter revenue outlook.

Sarepta Therapeutics (SRPT.O) faced a substantial 45.9% decline after its muscle disorder gene therapy failed in a late-stage trial. Shares of Sarepta’s client, Catalent (CTLT.N), also fell by 16.2%.

Advancing issues outnumbered decliners on both the NYSE and Nasdaq, but market conditions remained mixed, with no new 52-week highs recorded on the S&P index and a notable number of new lows on the Nasdaq.