S&P 500 ends lower, triggering rally on growing fears of slowdown

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NEW YORK — The S&P 500 ended a three-day winning streak on Wednesday as bleak earnings forecasts added to growing fears of a global economic slowdown.

But those fears, along with a lower-than-expected interest rate hike from the Bank of Canada, continued to fuel hopes that the Fed could consider easing the scale of its rate hikes after its meeting. November 1 and 2 policy.

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« Today the market is catching up with last week’s upward move, » said Matthew Keator, managing partner of Keator Group, a wealth management firm in Lenox, Massachusetts. « There are two more Fed meetings ahead of us this year. »

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Paul Kim, managing director of Simplify ETFs in New York, agrees.

« Central banks are starting to blink, » Kim said. « It’s part of the larger trend and supports the pivot narrative. »

The S&P 500 and Nasdaq ended in negative territory, dragged lower by market-leading and tech-adjacent technology companies following results from Microsoft and Alphabet.

Microsoft and Alphabet shares ended the session sharply lower.

These grim reports have raised concerns of an impending global economic slowdown from simmering to a boil and have spread to other high profile megacaps. Meta Platforms is expected to release its results shortly.

Sales of newly built homes in the United States plunged in September as mortgage rates hit their highest level in more than two decades, adding to the growing pile of data suggesting a slowing economic landscape.

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According to preliminary data, the S&P 500 fell 28.89 points, or 0.75%, to end at 3,830.22 points, while the Nasdaq Composite fell 229.67 points, or 2.05%, to 10 969.45. The Dow Jones Industrial Average rose 3.49 points, or 0.01%, to 31,840.23.

The third-quarter earnings season kicked into high gear, with 170 of the S&P 500 companies reporting. Of these, 75% provided results that exceeded the consensus, according to Refinitiv.

But they have a low bar to cross. Analysts expect overall S&P 500 earnings growth of 2.3%, down from 4.5% at the start of the month, according to Refinitiv.

« There have been pockets of promising corporate earnings announcements this quarter, » Keator added. « I don’t think it’s necessarily a done deal that we’re going to continue to see profit losses across the board. »

Boeing Co reported a bigger-than-expected loss in the third quarter, sending its shares tumbling.

On the positive side, Visa Inc rose on the back of the consumer finance company’s earnings growth.

(Reporting by Stephen Culp; Additional reporting by Amruta Khandekar and Shreyashi Sanyal in Bengaluru; Editing by Grant McCool)