Volatility Makes an Early Appearance to Start the Week

Volatility made an early appearance this week as the Dow Jones Industrial Average began the  trading session in the green, but then fell over 100 points with companies like United Technologies and Procter & Gamble declining. However, it quickly returned back to gain just over 25 points before dropping down to a shade under an 80-point loss as of 11:10 a.m.ET.

The S&P 500 was down for the 11th time in 13 days and is having its worst month since August 2015 as names like Nektar Therapeutics, Bristol-Myers Squibb Co and Hasbro Inc were the top decliners in the index. The Nasdaq Composite was the sole gainer in the early session, helped by Ctrip.com International and Baidu Inc.

Treasury note yields have been under close scrutiny as of late with yields reaching new highs, causing investors to fret that a recession may be looming. Yields, however, fell today with the benchmark yields ticking lower as the 10-year note dropped to 3.192, while the 30-year note ticked lower to 3.376.

Related: Tech Earnings: Alphabet, Microsoft, Twitter, Amazon Report This Week

The early rise in the Dow came as China’s Shanghai Composite rose more than 4%, besting a previous high set on March 2, 2016. Top Chinese officials continue to provide a vote of confidence in the country’s economy even with the threat of tariff wars being a possible disruptor.

“A deceleration in growth may put China more on the defense when it comes to trade negotiations, particularly relative to a US economy that continues to grow above trend,” said Katie Nixon, CIO at Northern Trust Wealth Management. “Trade is a key investment risk, and the resolution of the dispute with China may act as a drag for the foreseeable future.”

In the meantime, earnings weeks continue for U.S. equities as companies continue to report third quarter results with tech giants like Alphabet (Google’s parent company, Microsoft, Twitter, and Amazon scheduled to report. As investors begin to digest more results, the recent flight from stocks in the month of October could see more skittish investors returning.

“You need the market to calm down for investors to jump back in,” said Jeremy Klein, chief market strategist at FBN Securities. “Hopefully, earnings will help with that.”

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