Index Rebounds After Comments From Fed Officials

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Key Takeaways

  • U.S. equities rebounded from earlier losses with the S&P 500 finishing 0.6% higher on Monday, Oct. 9, 2023, after Fed officials suggested the recent surge in Treasury yields could diminish the likelihood of further interest rate hikes to curb inflation. 
  • Defense stocks rose and oil futures spiked amid concerns about conflict in the Middle East after fighting between Hamas and Israel broke out over the weekend.
  • Worries about a related pullback in travel demand and rise in fuel prices dragged down shares of airlines and cruise lines.

U.S. equities rebounded from earlier losses after Fed officials suggested the recent surge in Treasury yields could diminish the likelihood of further interest rate hikes to curb inflation. The S&P 500 increased 0.6%.

However, concerns about conflict in the Middle East after fighting between Hamas and Israel broke out over the weekend sent crude oil futures up more than 4%, and gold prices climbed with investors seeking so-called “safe haven” investments. The bond market was closed for a holiday in the U.S.

Defense stocks rose, with shares of Northrop Grumman (NOC) adding 11.5%, L3Harris Technologies (LXH) shares rising 10%, and shares of Lockheed Martin (LOC) gaining 9%. The jump in oil prices lifted oil industry stocks, with shares of Chevron (CVX) up almost 3%. 

Worries about a related pullback in travel demand and rise in fuel prices dragged down shares of airlines and cruise lines. United Airlines Holdings (UAL) shares lost about 5%, and shares of American Airlines (AAL) and Delta Air Lines (DAL) dipped 4%. Cruise line shares also sank, with Carnival Corporation (CCL) shares down more than 4%.

Shares of SolarEdge Technologies (SEDG) fell 4%, and First Solar (FSLR) shares declined 3% after OPEC predicted oil demand would increase more than previously anticipated, even with the expansion of “green” energy use.

Tesla (TSLA) shares shed 0.3% after a report showing its year-over-year sales in China were 10.9% lower last month. 



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