Risk aversion is shaping another tough day for Wall Street, with stocks trading in the red as investors await the presidential debate between Vice President Kamala Harris and former President Donald Trump, scheduled at 9 p.m. ET.

Energy and financial sectors are witnessing deeper losses, sharply underperforming the rest of the market.

In the latest monthly report, OPEC revised its global oil demand growth forecasts downward, now expecting 2024 oil demand to increase by 2.03 million barrels per day (bpd), down from the previous estimate of 2.1 million bpd. For 2025, OPEC has trimmed global demand growth forecast to 1.74 million bpd, compared to the earlier projection of 1.78 million bpd.

On the regulatory front, Federal Reserve Board Vice Chair for Supervision Michael Barr announced changes to the BASEL III and GSIB (Global Systemically Important Banks) surcharge proposals, which will now increase capital requirements for the largest banks by 9%, down from the original plan of 19%. Barr also clarified that banks with assets under $250 billion would largely be exempt from these heightened requirements.

Despite this capital relief, financial stocks sank across the board. The financial sector gauge fell 2%, with JPMorgan Chase & Co. JPM dropping 7%. The SPDR Regional Banking ETF KRE declined 2.6%, reflecting ongoing pressure even on the regional bank industry which is largely exempted from the regulation.

Elsewhere, Treasuries continued to rally. The iShares 20+ Year Treasury Bond ETF TLT rose 0.6%, hitting its highest levels since late July 2023.

The Japanese yen gained 0.5%, while both gold and Bitcoin BTC/USD traded broadly flat, reflecting a mixed sentiment in alternative assets.

According to Benzinga Pro data:

• The SPDR S&P 500 ETF Trust SPY was 0.2% lower to $545.43.
• The SPDR Dow Jones Industrial Average DIA fell 0.6% to $406.46.
• The tech-heavy Invesco QQQ Trust Series QQQ inched 0.1% higher to $454.91.
• The iShares Russell 2000 ETF IWM fell 1% to $206.36.
• The Real Estate Select Sector SPDR Fund XLRE outperformed, up 0.8%. The Energy Select Sector SPDR Fund XLE and the Financials Select Sector SPDR Fund XLF were the laggards, down 2.1% and 1.9%, respectively.

• Worst-performing energy stocks were Diamondback Energy, Inc. FANG, APA Corporation APA and Exxon Mobil Corporation XOM, down 5.1%, 5% and 3.4%, respectively.
• Hewlett Packard Enterprise Company HPE fell over 7% as the company announced it has commenced a public offering of $1.35 billion (27 million shares) of Series C mandatory convertible preferred stock.
• Oracle Corp. ORCL rallied 12% on the back of stronger-than-expected quarterly results.
• Other stocks reacting to earnings were Rubrik Inc. RBRK down 5.8% and Academy Sports and Outdoors Inc. ASO up 5.68%.
• GameStop Corp. GME will report earnings after the close.

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