The stock market faced a weakened trading session in the afternoon as Treasury yields reached a 16-year high, putting pressure on stocks. However, cryptocurrency-related stocks saw a rally. Tesla, on the other hand, gave back all its gains and returned to negative territory after reporting a decline in third-quarter auto deliveries.
Tesla’s stock trimmed 0.5% after the company announced a decrease in its third-quarter auto deliveries compared to the same period last year. The company reported deliveries of 435,059, with the decrease attributed to planned factory shutdowns. Tesla warned of further declines in deliveries due to these shutdowns. Currently, the stock is in a cup-with-handle base with a buy point of 278.98, but it is bumping up against its 50-day moving average.
In broader stock market action, the Nasdaq was up 0.2% during the afternoon session, while the Dow Jones Industrial Average was down 0.5% and the S&P 500 pulled back 0.4%. The major indexes remained significantly below their 50-day moving averages, with the Dow below its 200-day moving average. The Nasdaq and S&P 500 bounced last week after trending towards their 200-day lines. The small-cap Russell 2000 lost 1.7% and remains well below its 200-day line. Volume rose on the NYSE and fell on the Nasdaq compared to the same time on Friday. Declining stocks outnumbered advancers by roughly 3-1 on the Nasdaq and by more than 4-1 on the NYSE. The Nasdaq 100-tracking Invesco QQQ Trust ETF gained 0.3%, but the Innovator IBD 50 ETF weakened and was down 0.7%.
The benchmark 10-year Treasury yield surged 10 basis points to 4.67%, reaching its highest point this year and the highest since July 2007. Rising borrowing costs are putting pressure on stocks, and the morning’s economic data supported the case for higher interest rates for a longer period. The final Purchasing Managers’ Manufacturing Index (PMI) reading for September came in higher than expected at 49.8, indicating growth in the private-sector economy. The Institute for Supply Management (ISM) Index also exceeded expectations, coming in at 49.0, higher than the forecasted 47.8 and the previous month’s 47.6. The government’s avoidance of a shutdown also contributed to rising yields, as the House and the Senate approved a 45-day temporary solution to keep the government open.
Crypto-related stocks experienced a rally as Bitcoin surged nearly 4% to over $28,000. Crypto mining stock Riot Platforms surged over 8%, while digital asset miner and blockchain stock Marathon Digital spiked 4.2%. Crypto fintech stock Coinbase also saw gains, albeit smaller ones, as it rose 1.3%.
In other stock market movers, Discover Financial Services gapped up over 5%, while Insulet popped over 3% after receiving an upgrade from Jefferies. Sphere Entertainment soared nearly 14% after opening its Sphere venue with a concert by rock band U2. Zscaler, an IBD 50 component, rallied 3.4% after receiving an upgrade from Piper Sandler.
Overall, the stock market faced a weakened trading session due to rising Treasury yields. Cryptocurrency-related stocks, however, experienced a rally, whereas Tesla gave back its gains and returned to negative territory.
