Investing.com -- The S&P 500 fell Monday as investor sentiment was soured by Nvidia-led weakness in chip stocks and a jump in Treasury yields following stronger retail sales data that boosted bets on a Fed rate hike by year end.
The Dow Jones Industrial Average fell 0.3% or 100 points, the Nasdaq gained 0.5%, and the S&P 500 fell 0.4%.
Treasury yields surge as retail sales top estimates
Treasury yields continued their surge higher, with the yield on the 2-year treasury rising to a 17-year high after better-than-expected retail sales pointed to ongoing economic strength, suggested the Fed still has more work to do.
Retail sales rose 0.7% last month, markedly beating economists’ forecast for a 0.3% rise. The retail sales control group – which has a larger impact on U.S. GDP – rose 0.6% well above expectations for a 0.1% rise.
While a November rate hike remained low at 10%, the odds of a December hike jumped to 42% from 26% the prior week, according to Investing.com’s Fed Rate Monitor Tool.
Bank of America impresses on earnings stage, but Goldman falters
Bank of America Corp (NYSE:BAC) reported quarterly results that topped Wall Street, sending its share more than 2% higher.
Goldman Sachs’ Q3 earnings, however, missed estimates amid losses from its real investment and Greensky fintech business.
The bank suffered a $358 million write down on its real estate investment as the sector has come under pressure from a sharp surge in interest rates.
Johnson and Johnson, Lockheed Martin deliver earnings beat
Johnson & Johnson (NYSE:JNJ) upgraded its annual guidance on performance after reporting quarterly results that beat on the top and bottom lines, but the pharmaceutical company’s stock was 1% lower.
The company now sees annual sales in a range of $83.6 to $84 billion from a prior estimate of $83.2 billion to $84 billion, with adjusted EPS forecast between $10.07 and $10.13 from $10.00 to $10.10
Lockheed Martin (NYSE:LMT) fell nearly 1% as the defense company’s third-quarter results topped analyst estimates, though concerns about the impact of delivery delays for its F-35 jets weighed.
Nvidia leads chips lower as U.S. looks to tightened restrictions on chip exports to China
NVIDIA Corporation (NASDAQ:NVDA) fell more than 5% to lead the broader chip sector lower following a Bloomberg report that the U.S. is restricting the sale of semicondutors that the chipmaker designed for the Chinese market.
The tighter restrictions would now include Nvidia’s A800 and H800 chips, the lower performance GPUs, that Nvidia devised after the initial U.S. exports last October.
The expanded curbs come as the U.S. aims to curb loopholes that allowed Chinese firms to evade export controls introduce last year by routing chip shipments through other nations.
Nvidia said, however, that it doesn’t expect a “near -term meaningful impact” from the expanded exports curbs on its financial results.