EBC Markets Briefing | Wall St buckles on inflation woes

US stocks dropped to their worst day since July on Wednesday as the Fed's interest rate decision later ‌this month may be a closer call than previously thought.

Driven by the AI boom, investors' exposure to technology stocks has reached its highest level since the post-pandemic market rebound, according to a survey by BofA.

Respondents in the survey said semiconductor stocks were the market's most crowded trade. Institutions remain divided regarding potential AI bubbles and systemic risks.

BlackRock has downgraded its outlook on US equities to neutral. Concurrently, the institute has upgraded US Treasuries, expressing a clear preference for short-term notes.

Several major Wall St banks have reported Q3 earnings that missed analyst expectations, sparking caution despite some pocketed areas of strong performance.

Saudi officials stated that Houthi militants targeted a Saudi Aramco administrative building overnight. The Tehran-backed rebels have recently intensified their attacks on the kingdom.

EBC Financial Group analyst says the S&P 500 has broken below the 50 SMA. A double top pattern might be in the making, which would likely flip 7,690 into a major resistance.

Asset Recap

As of market close on 14 October, among EBC major products, ProShares UltraPro Short QQQ led gains as Nasdaq 100 ended sharply lower following a hotter-than-expected inflation report.

UnitedHealth Group raised its full-year profit forecast and posted Q3 earnings that beat Wall Street estimates. The results signalled progress in the healthcare giant's turnaround plan.

Gold extended losses for a third straight session. While gold is typically seen as a hedge against inflation, higher interest rates tend to diminish the appeal of non-yielding bullion.

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EBC Financial Group Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC Global Financial Collaboration or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.