Gold prices return to 1980, US stocks fall, safe-haven demand and economic data who will be better?

On Wednesday (October 25), in the US market, as Google's parent company Alphabet's share price fell, the Nasdaq Composite Index and the S & P 500 Index fell, and the rebound in the 10-year Treasury yield also weighed on related stocks.

At press time, the Nasdaq Composite Index was down 1.61%, while the S & P 500 Index retreated 0.82%. The Dow Jones Industries Average Index was up 0.25%. The S & P 500 Index fell about 2% in October.

Google parent company Alphabet's shares fell more than 8 percent as its cloud business missed analysts' expectations, masking its strong revenue growth and earnings growth. Alphabet stock's decline was the worst since October 2022. The S & P 500 Index communications services sector, which is the largest component of the sector, fell nearly 5 percent and was on track for its worst day since October 2022.

Meanwhile, shares of tech giants and Apple and Amazon fell 0.3 percent and 3.3 percent, respectively. Amazon will report its third-quarter results after the market closed on Thursday.

While corporate earnings remain a focus for investors this week, investors are also keeping a close eye on yields as they hover near multi-year highs. The yield on the benchmark 10-year Treasury note rose seven basis points back above 4.90%. Earlier this week, it was trading above 5%, rattling investors and hitting tech stocks.

"This is grabbing the headlines and I can't take my eyes off the bond market," said Ed Moya, senior market analyst at Oanda. "We haven't seen yields soar this much since 1982 and that should spell trouble for equities."

Safe-haven gold rallied on Wednesday, buoyed by ongoing conflict in the Middle East, while investors looked to key U.S. economic data for further insight into the Federal Reserve's policy path.

Spot gold rose 0.56 per cent to $1982.10 an ounce at press time after falling in the previous two sessions and trading below the five-month highs hit last week.

Bob Haberkorn, senior market strategist at RJO Futures, said that geopolitical concerns are not going away anytime soon, which will continue to support gold.

The Israeli military stepped up its bombardment of southern Gaza overnight amid international calls for a suspension of fighting.

The dollar index and benchmark U.S. 10-year Treasury yields edged higher, limiting gold's gains.

Investors' attention turned to Thursday's release of U.S. third-quarter GDP data and Friday's release of the U.S. PCE price index, which could affect the Federal Reserve's interest rate outlook.

Higher interest rates raise the opportunity cost of holding non-yielding gold.

According to CME Group's FedWatch tool, the market generally expects the Federal Reserve to maintain interest rates unchanged at its policy meeting next month.

Haberkorn added that if the data shows a slowing economy, that would give the Federal Reserve more reason not to raise interest rates, which should be very positive for gold and bring the price back above $2,000.

Tuesday's survey showed that U.S. business activity rose in October while eurozone output unexpectedly deteriorated, highlighting the divergent paths of central bankers in the two regions.