Stock Market Edged Lower as Investors Awaited Powell's Remarks

U.S. stock markets experienced a decline on Thursday, extending their losses from the previous session. This decline was influenced by the continued increase in Treasury bond yields, with investors eagerly anticipating comments from Federal Reserve Chairman Jerome Powell.

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Here's how the major stock indices were performing:

• The S&P 500 (SPX) rose by 2 points, or 0.1%, reaching 4,317.
• The Dow Jones Industrial Average (DJIA) gained 35 points, or 0.1%, reaching 33,691.
• The Nasdaq Composite (COMP) saw a rise of 11.5 points, or 0.1%, reaching 13,327.

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In the prior day's trading, the Dow experienced a decline of 333 points, or 1%, closing at 33,665, thus breaking a three-day winning streak, and main stock indices had turned lower for the week.

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Several factors played a role in driving market dynamics. Lingering concerns about the potential escalation of the Hamas-Israel conflict, coupled with a notable increase in benchmark bond yields, exerted pressure on stocks. The tech-heavy Nasdaq, however, outperformed thanks to gains in the "Magnificent Seven" stocks.

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Investor attention remained focused on bond yields, particularly the 10-year Treasury yield, which approached the 5% mark, reaching its highest level since the summer of 2007. It registered an increase of 4.8 basis points during the day, settling at 4.949%, according to FactSet data.

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Market participants were keen to hear from Jerome Powell as he addressed the Economic Club of New York at noon. His remarks were highly anticipated as investors sought insights into how rising Treasury yields might impact the Federal Reserve's policy decisions. This followed comments from other senior Fed officials who suggested that rising yields could influence the central bank's stance on interest rate hikes.

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Labor market data released on Thursday exceeded expectations, as the number of Americans filing for unemployment benefits dropped to a nine-month low of 198,000. This was contrary to predictions of increased layoffs resulting from higher U.S. interest rates impacting the economy.

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In contrast, a gauge of regional business activity published by the Philadelphia Fed indicated that economic conditions remained in contractionary territory for the second consecutive month in October.

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Housing market data revealed a decline in home sales in September to the lowest level since 2010. High mortgage rates continued to deter both buyers and sellers, with sales of previously owned homes falling by 2% to an annual rate of 3.96 million in September.

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Furthermore, the third-quarter corporate earnings reporting season was ongoing. Results from AT&T and Blackstone surpassed expectations. Additional reports from Western Alliance Bancorp, CSX, and Intuitive Surgical were expected to follow after the close of trading.

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In the broader market context, recent results from Netflix and Tesla had contrasting effects. Netflix's strong performance led to a 12.5% surge in its shares, while Tesla's stock fell by 7% following cautious comments from Elon Musk. Among the "Magnificent 7" stocks, Tesla was the only one trading in the red early on Thursday. In contrast, shares of Amazon.com were up by 2.4%, and shares of chip maker and AI innovator Nvidia Corp. saw a 1.6% increase.

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