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The stock market is down Wednesday, with the major averages back around the lows of the session on a report Binance is backing out of its FTX takeover.
The tech focused Nasdaq Composite (COMP.IND) is lower by 1.3%, the S&P 500 (SP500) dipped 1%, and the Dow (DJI) is off by 0.9%.
The S&P is testing support at 3,796.
Bitcoin is down 12% at its lows of the day on the Coin Desk report that Binance is balking after seeing FTX’s financials.
Ten of 11 S&P sectors are lower. Energy and Info Tech are the weakest. Only Healthcare is in the green.
In politics, control of Congress is yet to be determined. The GOP looks to be closing in on winning the House, but a red wave did not materialize.
“Election results are still uncertain, but the red wave that models, investors, and betting markets anticipated did not materialize, and near-term, that will add to already elevated volatility,” 22V Research said.
Market attention will soon be turning from the election to inflation with CPI on tap for Thursday.
Rates are having a tough time with direction. The 10-year Treasury yield (US10Y) is down 1 basis point to 4.12%. The 2-year yield (US2Y) is down 1 basis point to 4.67%.
“A high CPI print could push terminal rate expectations higher and revive the debate about further financial condition tightening being needed. A weak print would increase expectations for an instrument pivot. Near-term vol is tied to unpredictable economic data,” 22V said. “Longer-term, we expect volatility will trend lower given slowing growth and stable terminal rate expectations, but this week could be a speed bump.”
Disney is the weakest stock in the S&P following disappointing earnings and revenue. Meta is the strongest as it announced sweeping layoffs.
