Overview:
On Monday, September 30, 2024, the S&P 500 eked out a record closing high, rebounding from a brief dip following comments by Federal Reserve Chair Jerome Powell. Powell mentioned that the Fed is in no rush to implement further interest rate cuts but signaled that two additional cuts, totaling 50 basis points, could be expected by the end of the year if the economy evolves as forecasted. The Dow Jones Industrial Average also hit a new all-time closing high as all three major indexes registered gains for the month and quarter.
The Dow Jones rose slightly by 0.04%, closing at 42,330.15. The S&P 500 advanced 0.42% to end at 5,762.48, and the Nasdaq Composite gained 0.38%, finishing at 18,189.17. For the month, the S&P 500 gained 2%, marking its best September performance since 2013, while the Dow posted an impressive 8.2% quarterly gain.
Fear & Greed Index:
Neutral – Market sentiment remains balanced, with investors looking toward further Federal Reserve decisions on interest rate cuts while maintaining a cautious outlook on upcoming economic data.
Key Indices (Closed Prices):
- Dow Jones Industrial Average: +0.04% at 42,330.15 (Record high)
- S&P 500: +0.42% at 5,762.48 (Record high)
- Nasdaq Composite: +0.38% at 18,189.17
Sector Performance:
- Winners:
- Healthcare: CVS Health rose 2.4% after a report indicated that Glenview Capital Management will meet top executives to propose operational improvements.
- Consumer Discretionary: The sector outperformed, with retail and consumer-related stocks benefitting from positive investor sentiment about potential Fed rate cuts.
- Losers:
- Energy: The energy sector underperformed due to falling crude oil prices and weak demand forecasts.
- Technology: Despite overall market gains, tech stocks lagged due to profit-taking following a strong September rally.
Key Movers:
- CVS Health (CVS): Gained 2.4% on news that Glenview Capital Management plans to meet with company executives to discuss ways to boost operations.
- Tesla (TSLA): Rose 3.12% after reporting stronger-than-expected deliveries for the quarter, leading the consumer discretionary sector.
- Amazon (AMZN): Gained 1.65% as investors expect a boost in retail activity ahead of the holiday season.
- ExxonMobil (XOM): Declined 1.8% following lower oil prices and weak demand forecasts.
Economic Data:
- Federal Reserve Outlook: Federal Reserve Chair Jerome Powell indicated that two more 25 basis point rate cuts could be expected by year’s end if the economy continues on its current path. Powell’s speech was delivered at the National Association for Business Economics Conference in Nashville, Tennessee.
- Jobless Claims and Payrolls: Key economic reports on jobless claims and monthly payrolls are expected later this week, providing crucial insights into the labor market’s health.
- Market Sentiment: Investors largely absorbed Powell’s comments, with traders now pricing in a 35% chance of a 50 basis point cut in November, slightly down from last week.
Outlook:
As the Federal Reserve remains cautious about the pace of future interest rate cuts, the focus shifts to the upcoming economic data on jobless claims and payrolls. Investors are optimistic about a potential “soft landing” for the economy, and momentum from the S&P 500’s best September since 2013 supports this outlook. However, sectors such as technology and energy may face short-term headwinds as investors look to balance portfolios in anticipation of year-end rate decisions.