Fear is what kills stocks.

This report is from today’s international market newsletter CNBC Daily Open. The CNBC Daily Open provides investors with everything they need to know, no matter where they are. Is it what you see? You can subscribe here.

Stock prices fell due to deep-seated concerns.
Major U.S. indexes fell on Monday. of S&P500 lost 0.96%, Dow Jones Industrial Average down 0.94%, Nasdaq Composite It fell by 1.18%. but super micro The stock price rose 15.8%, making it a positive topic. regions of europe Stocks 600 The index added 0.18%. Household products led the gains, closing 0.97% higher, while tech stocks fell 0.65%.

No more jumbo cuts
Strategists told CNBC that there is virtually no chance the Federal Reserve will cut interest rates at its next meeting following the disappointing September jobs report released last week. Traders agree. A week ago, they bet on a 34.7% chance of another big Fed rate cut. According to the CME FedWatch Tool, today it is 0%.

Demand for AI remains high
Artificial intelligence boom ‘still takes time’ foxconn Foxconn CEO and Chairman Young Liu told CNBC. Foxconn, which reported better-than-expected profits in the third quarter, makes electronics for technology giants including: apple and Nvidia. Demand for Nvidia’s latest chip, Blackwell, is “much better than we expected,” Liu said.

Oil prices rise due to tensions
Oil prices rose about 3.7% on Monday on concerns that Israel would attack Iranian oil production facilities. Analysts said an Israeli attack on Khalg Island could disrupt shipments of 90% of Iran’s crude oil exports. last week was great west texas intermediate and brent Crude oil prices rose for the first time in more than a year and a half. They rose by 9.1% and 8.4%, respectively.

(PRO) Goldman is getting even more bullish.
The S&P 500 index is in the red so far in October. but goldman sachs The firm raised its S&P 2024 target to 6,000 from 5,600, making it the second-highest forecast on Wall Street, according to a CNBC Market Strategist survey. Goldman also raised its 12-month S&P target to 6,300 from 6,000. This is why banks are so bullish on stocks.

The blockbuster jobs report for September, released on Friday, lifted sentiment and stock prices enough that the major indexes reversed their declines and finished last week marginally positive.

Then the light is now gone. Markets are back to grappling with rising oil prices, the possibility of a reacceleration of inflation, lower-than-expected interest rate cuts, and even the possibility of a distant recession.

Oil prices soared yesterday after their best week in a year. And after September’s blockbuster jobs report, futures markets are pricing in a 13.7% chance the Fed won’t cut interest rates at its November meeting. That’s a dramatic change from a week ago, when traders thought there was a 34.7% chance of a 50 basis point rate cut.

But a recession?

Admittedly, that’s just my guess. But as CNBC’s Jeff Cox pointed out, it’s fair to point out that the 10-year and 2-year yield curves are “heading back into danger territory.”

Simply put, a yield inversion occurs when the 10-year Treasury yield is lower than the 2-year Treasury yield. This has almost always preceded recessions since the mid-1970s. The yield curve inverted in early July 2022 and normalized in early September.

But since Monday, the difference between the 10-year Treasury yield and the 2-year Treasury yield is just 3.5 basis points. So it’s not inconceivable that investors looking for yield curve signals might panic a bit.

Still, strategists believe a recession is far-fetched given the health of the U.S. economy.

“The economy is doing well, thank you very much,” said David Roche, founder and strategist at Quantum Strategy.

“The chances of the U.S. economy going into recession at least in the fourth quarter of this year, and probably in the first quarter of next year, are close to zero,” said Bob Parker, senior adviser at International. Capital Markets Association.

Concrete numbers drive market movements. But there is an undercurrent of fear that perhaps goes against what some of these numbers are showing.

– CNBC, Jeff Cox, Lisa Kai-Lai Han and Jesse Pound contributed to this article.