Stock market stumbles as oil prices rise

The stock market faced challenges on Monday as oil prices climbed and Treasury yields rose.

Chinese and highly China sensitive stock markets had a really volatile session today — consistent with the view, which I see as correct (please see earlier posts, including over the last two weeks), that investors and traders were expecting way too much in terms of government… pic.twitter.com/M8w4F0hT2V

— Mohamed A. El-Erian (@elerianm) October 8, 2024

The Dow Jones Industrial Average lost nearly 400 points, or 0.94%, while the S&P 500 sank 0.96% and the Nasdaq Composite dropped 1.18%. U.S. crude climbed more than 3% per barrel, and the 10-year Treasury yield rose above 4% for the first time since August, adding more than 4 basis points to reach 4.02%.

And just like that, the yield on the 10-year US government bond, a global benchmark, is back at 4%.#economy #markets #investing #investors pic.twitter.com/ynpDxuDY42

— Mohamed A. El-Erian (@elerianm) October 7, 2024

Hurricane Milton was upgraded to a Category 4 storm on Monday as it passed over the southern Gulf of Mexico. Shares of backup power generation company Generac surged, hitting a new 52-week high as the storm intensified. Insurance companies, however, didn’t fare as well, with Universal Insurance Holdings plunging about 20% and other stocks with weather catastrophe exposure such as Allstate and Travelers falling more than 3%.

Commodity Spot Index from ⁦@Bloomberg⁩ working on its third consecutive monthly gain, which would be second three-month winning streak this year if it holds
[Past performance is no guarantee of future results] pic.twitter.com/M8YOavHtm4

— Liz Ann Sonders (@LizAnnSonders) October 8, 2024

Milton, which was downgraded to a Category 3 early Tuesday, is projected to hit the Tampa Bay area of Florida on Wednesday, with forecasters warning of a possible 8- to 12-foot storm surge. General Motors is hosting its first capital markets day in two years at its vehicle and battery plants in Spring Hill, Tennessee. The return comes as the automaker faces slowing consumer demand and changing market conditions.

Stock market reacts to oil surge

Wall Street analysts expect GM to be measured in its goals, with low expectations. Investors are looking for updates on electric vehicles, hybrids, its embattled Cruise autonomous vehicle unit, and its China restructuring efforts.

FTX

FTX creditors are projected to receive $1.19 for every dollar in the company’s bankruptcy plan. A Delaware bankruptcy judge approved FTX’s reorganization plan almost two years after the crypto exchange spiraled into bankruptcy. The company, which previously estimated that it owes creditors around $11.2 billion, said it has collected between $14.7 billion and $16.5 billion worth of property for distribution. FTX raised the money by selling some assets. Ryan Salame, formerly of FTX, is scheduled to arrive at the federal prison on October 11, but he is making light of the situation so far.

Google and Epic Games

Google will be forced to allow alternative payment systems for downloading apps after a ruling from a U.S. judge. This is the most significant outcome of Epic Games’ antitrust lawsuit against Google, which began in 2020. Epic Games, which makes the popular video game Fortnite, accused Google of anti-competitive practices, including those related to its app store. This decision could be a boon for developers, as both Google and Apple’s app stores typically take between 15% and 30% of total sales for high-grossing apps.