# Stocks fall, bond yields rise as focus shifts to Fed, rate outlook
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-11-01
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: U.S. Fed poised for 4th rate hike, stocks uneasy
Meta Description: Read the latest on global stock index fall and U.S. Treasury yields ahead of the Federal Reserve's interest rate decision. Stay informed!
URL: https://financedigest.com/stocks-fall-bond-yields-rise-as-focus-shifts-to-fed-rate-outlookhtml

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By Caroline Valetkevitch

NEW YORK (Reuters) – A global stock index fell and U.S. [Treasury yields](https://www.financedigest.com/wall-street-drops-treasury-yields-gyrate-on-fed-chairman-powells-remarks.html "Wall Street drops, Treasury yields gyrate on Fed Chairman Powell’s remarks") edged up on Monday as investors prepared for the U.S. Federal Reserve to stick with its aggressive approach to [raising interest rates](https://www.financedigest.com/dollar-falls-after-fed-raises-rates-forecasts-future-hike.html "Dollar falls after Fed raises rates, forecasts future hike") this week.

The [dollar advanced](https://www.financedigest.com/dollar-advances-as-strong-u-s-data-backs-higher-rates-backdrop.html "Dollar advances as strong U.S. data backs higher rates backdrop") across the board.

Even though they declined for the day, major U.S. [stock indexes posted strong gains](https://www.financedigest.com/stocks-mixed-dollar-gains-after-robust-inflation-jobs-data.html "Stocks mixed, dollar gains after robust inflation, jobs data") for October, with the Dow’s percentage gain in October its strongest for any month since 1976. The Dow jumped about 14% for the month.

The Fed, which begins its two-day meeting Tuesday, is expected to [deliver a fourth straight 75-basis-point rate hike](https://www.financedigest.com/stocks-falter-as-economic-worries-nag-nz-delivers-big-rate-hike.html "Stocks falter as economic worries nag, NZ delivers big rate hike") on Wednesday in its attempt to tame inflation. [Investors will also focus on the communication of the outlook](https://www.financedigest.com/oil-steadies-after-dipping-on-china-outlook-investors-await-fed-clues.html "Oil steadies after dipping on China outlook; investors await Fed clues").

Some investors have been entertaining the idea the [Fed could pause its rate hikes](https://www.financedigest.com/wall-street-slips-dollar-gains-as-fed-seen-hiking-rates-in-may.html "Wall Street slips, dollar gains as Fed seen hiking rates in May") or at least shift to a less aggressivee hiking campaign, and those views have helped support stocks recently. Others [see little](https://www.financedigest.com/analysis-weary-investors-see-little-respite-to-fed-hike-gloom.html "Analysis-Weary investors see little respite to Fed hike gloom") evidence to support that view.

The bond market has continued to doubt that the [Fed is ready to either slow interest rate](https://www.financedigest.com/dollar-hits-one-month-high-against-yen-as-traders-bet-on-fed-rate-hike.html "Dollar hits one-month high against yen as traders bet on Fed rate hike") increases or actually move to the sidelines,” said Anthony Saglimbene, chief market strategist at Ameriprise Financial in Troy, Michigan, adding that markets had gotten ahead of themselves.

[Investors are expecting](https://www.financedigest.com/wave-of-lawsuits-over-ftx-expected-but-investors-will-face-legal-hurdles.html "‘Wave’ of lawsuits over FTX expected, but investors will face legal hurdles") another 75 basis-point rate hike by the Bank of England later this week as well.

Investors also were digesting [data released Monday that showed eurozone inflation](https://www.financedigest.com/european-shares-rise-as-us-inflation-data-signals-end-of-rate-hike-cycle.html "European shares rise as US inflation data signals end of rate-hike cycle") came in hotter than expected and also, separately, data that showed China’s factory activity unexpectedly fell in October.

The Dow Jones [Industrial Average](https://www.financedigest.com/average-annual-uk-grocery-bill-highest-since-at-least-2008-industry-data.html "Average annual UK grocery bill highest since at least 2008 -industry data") fell 128.85 points, or 0.39%, to 32,732.95, the S&P 500 lost 29.08 points, or 0.75%, to 3,871.98 and the Nasdaq Composite dropped 114.31 points, or 1.03%, to 10,988.15.

Quarterly results from S&P 500 [tech and growth companies have so far been mixed this earnings](https://www.financedigest.com/tech-earnings-hit-pause-button-on-market-rally.html "Tech earnings hit pause button on market rally") season, adding to recent volatility in U.S. stocks.

The pan-European STOXX 600 index rose 0.35% and MSCI’s gauge of stocks [across the globe](https://www.financedigest.com/germany-u-s-agree-to-new-covid-curbs-as-omicron-spreads-across-globe.html "Germany, U.S. agree to new COVID curbs as Omicron spreads across globe") shed 0.44%.

The yield on two-year notes, which typically moves in step with [rate expectations](https://www.financedigest.com/ecbs-makhlouf-expects-50-bps-rate-hike-in-december.html "ECB’s Makhlouf expects 50 bps rate hike in December"), was up 8.1 basis points at 4.503% while the 10-year yield rose 7.1 basis points to 4.081%.

U.S. wheat futures jumped, hitting a two-week high, and corn rose more than 1% as Russia’s withdrawal from a Black Sea export agreement raised [concerns over global supplies](https://www.financedigest.com/oil-gains-as-russian-supply-cuts-temper-concerns-over-rate-hikes-high-stocks.html "Oil gains as Russian supply cuts temper concerns over rate hikes, high stocks").

Benchmark CBOT wheat futures [hit a record](https://www.financedigest.com/uk-shop-price-inflation-hits-record-8-in-january-brc-2.html "UK shop price inflation hits record 8% in January: BRC") high of $13.63-1/2 a bushel in March.

GRAPHIC – Key food and [energy prices drop](https://www.financedigest.com/uk-energy-regulator-drops-plan-to-ring-fence-customers-cash.html "UK energy regulator drops plan to ring fence customers’ cash") after initial panic https://fingfx.thomsonreuters.com/gfx/mkt/klvygebkjvg/Pasted%20image%201667217490995.png

GRAINS REPORT

In currencies, the [dollar rose 0.8% against the struggling yen](https://www.financedigest.com/yen-sinks-as-rates-outlook-diverges-nz-dollar-tumbles.html "Yen sinks as rates outlook diverges; NZ dollar tumbles") to 148.62 yen. For the month of October, the dollar was up 2.7%, on track to post its third monthly [gain versus the Japanese](https://www.financedigest.com/japanese-yen-gains-as-ueda-set-to-be-named-next-boj-governor.html "Japanese yen gains as Ueda set to be named next BOJ governor") currency.

On Monday, Japan’s finance ministry said it spent a record $42.8 billion on currency intervention this month to prop up the yen.

The [euro dropped 0.8% against the dollar](https://www.financedigest.com/euro-rises-after-spanish-cpi-dollar-slips-towards-8-mth-low.html "Euro rises after Spanish CPI, dollar slips towards 8-mth low") to $0.9887. Elsewhere, the Chinese yuan [slumped after data](https://www.financedigest.com/oil-slumps-on-economic-data-stronger-u-s-dollar.html "Oil slumps on economic data, stronger U.S. dollar") released on Monday showed China’s factory activity unexpectedly fell in October.

The [dollar was last 0.9% higher](https://www.financedigest.com/dollar-jumps-as-powell-flags-higher-terminal-rate.html "Dollar jumps as Powell flags higher terminal rate") against the yuan traded offshore at 7.336.

Brazil’s currency and main [stock index rallied](https://www.financedigest.com/asian-stocks-rally-as-bank-jitters-calm-alibaba-lifts-mood.html "Asian stocks rally as bank jitters calm, Alibaba lifts mood") Monday, a day after leftist Luiz Inacio Lula da Silva won the country’s presidential election.

The Brazilian real [gained more than 2% against the dollar](https://www.financedigest.com/dollar-slips-yuan-gains-on-china-pmi-hot-inflation-lifts-euro.html "Dollar slips, yuan gains on China PMI; hot inflation lifts euro") after having fallen 2% overnight. The Bovespa [stock index sank 2% at the opening](https://www.financedigest.com/world-stocks-upbeat-on-hopes-for-china-re-opening-inflation-peaking.html "World stocks upbeat on hopes for China re-opening, inflation peaking") and ended the session up 1.3%.

In the energy market, [oil prices](https://www.financedigest.com/shares-fall-with-oil-prices-amid-concerns-about-u-s-fed-rate-hikes.html "Shares fall with oil prices amid concerns about U.S. Fed rate hikes") fell as investors expected U.S. production could increase. Brent crude futures dropped 94 cents, or 0.98%, to $94.83 a barrel. U.S. West Texas Intermediate crude fell $1.37 to $86.53 a barrel, a 1.6% loss.

(Additional reporting by Marc Jones in London, and Herbert Lash and Rodrigo Campos in New York; Editing by Kirsten Donovan, Angus MacSwan, David Gregorio and Deepa Babington)


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