ECB holds rates, sources signal December hike in market roundup

Market data:

• WTI crude oil declined 46-0cetns to $102.32.
• US 10-year Treasury yields dropped 6.3 basis points to 4.98%.
• The British pound led, while the Australian dollar lagged.
• Gold fell $44 to $4022.
• The S&P 500 decreased 0.3%, and the Nasdaq fell 1.4%.

The ECB's hold decision was not unexpected, but the overall commentary carried a hawkish inclination, as Lagarde noted some pass-through from energy inflation. That was overtaken by the usual 'ECB sources' reports that pointed to a December rate hike but said there would be a pause thereafter. The euro moved within a range but eventually reversed early losses to close slightly higher.

On the Iran situation, a US senator from the foreign relations committee warned of 'insane' war plans being drafted to strike civilian infrastructure. That reversed some of the oil price declines, along with various other reports of attacks, compounded by Iranian assaults on ships near Hormuz and Houthie attacks on Saudi facilities.

In the equity markets, the largest loser was Alphabet, which dropped 12.5% after its earnings, as signs emerged that AI is cutting into search. Despite that, the Nasdaq fell only 1.3% and the S&P 500 slipped just 0.3%. A major positive came from Eli Lilly, which rose 6.5% to a record high following strong weight-loss results. Additionally, advancers significantly outnumbered decliners, and the Russell 2000 advanced 0.7%, possibly as the market concluded the FOMC was less hawkish than anticipated.

In after-hours trading, the earnings reaction was harsh for Intel and Amazon, with both falling by double digits on their earnings headlines. This has led to a decline in futures.

Rest in peace, Patrick Stewart.