Overview:
The U.S. stock market closed mixed on Wednesday, September 25, 2024, as investors pulled back from record highs and awaited key economic data and insights into future interest rate cuts. The Dow Jones Industrial Average fell 0.70% to close at 41,914.75, while the S&P 500 dropped 0.19% to settle at 5,722.26. The Nasdaq Composite eked out a small gain, rising 0.04% to close at 18,082.21, buoyed by continued strength in technology stocks.
Despite the recent Federal Reserve rate cut on September 18, which bolstered hopes for a “soft landing,” weaker consumer sentiment data from earlier in the week raised concerns about the U.S. labor market’s health. Investors are now focused on upcoming jobless claims and the August U.S. Personal Consumption Expenditures (PCE) index, which will provide further clues on inflation and labor market conditions.
Fear & Greed Index:
Neutral – Market sentiment remains cautious as investors await further economic indicators and insights from Federal Reserve officials.
Key Indices (Closed Prices):
- Dow Jones Industrial Average: -0.70% at 41,914.75
- S&P 500: -0.19% at 5,722.26
- Nasdaq Composite: +0.04% at 18,082.21
Sector Performance:
- Winners:
- Technology: Tech stocks continued to rise, with Nvidia gaining 2.14%, helping the Nasdaq hold onto a slight gain.
- Communications: Hewlett Packard Enterprise rose 5.14%, topping the S&P 500 after receiving an upgrade from Barclays.
- Losers:
- Energy: The sector fell 1.9%, led by declines in ExxonMobil and Chevron, as energy prices retreated following a brief spike last week.
- Financials: Bank stocks, including Citigroup, Bank of America, and JPMorgan, dropped amid concerns over future rate cuts and the broader economic outlook.
Key Movers:
- Nvidia (NVDA): Gained 2.14%, continuing to benefit from strong demand for its AI chips, leading the tech sector.
- Visa (V): Dropped 5.49% after the company was hit with an antitrust lawsuit by the U.S. Department of Justice.
- FedEx (FDX): Declined 5.35% after posting a weaker-than-expected third-quarter profit, citing ongoing challenges in the global shipping market.
- General Motors (GM) and Ford (F): Both dropped more than 4% after Morgan Stanley downgraded both automakers due to weakening demand and rising competition.
Economic Data:
- Treasury Yields: The yield on the 10-year Treasury note rose slightly to 3.72% as concerns about looser financial conditions potentially reigniting inflation weighed on long-term bonds.
- Consumer Confidence: Weaker-than-expected consumer sentiment data released earlier in the week continued to dampen investor sentiment, highlighting potential weaknesses in the labor market.
- Housing Data: New U.S. single-family home sales fell in August, but the decline in mortgage rates and home prices is expected to support demand in the coming months.
Outlook:
Investors are closely watching upcoming economic data, particularly the jobless claims and Personal Consumption Expenditures (PCE) index reports later this week, which could provide key insights into inflation trends and labor market conditions. Remarks from Federal Reserve officials, including Fed Chair Jerome Powell at the New York Treasury Market Conference on Thursday, are also likely to provide further guidance on the central bank’s future monetary policy actions.
While technology stocks continue to drive gains, concerns remain over stretched valuations and the potential for an economic slowdown. Energy stocks may face further pressure as oil prices stabilize, and financials could remain volatile amid broader market uncertainty.