Stock market today: Dow, S&P 500 eke out record closes as stocks extend September rally
09/24/2024 03:05
The focus is on Fed speakers and a key inflation reading for insight into whether another big rate cut is coming.
US stocks rose Monday with the Dow Jones Industrial Average (^DJI) eking out another record close, extending a winning week on Wall Street, as investors looked ahead to Federal Reserve speakers and a key inflation reading for clues to the odds of another big rate cut.
The Dow rose more than 0.1% after closing at an all-time high last Friday. The S&P 500 (^GSPC) also rose more than 0.2% to finish at a fresh record. The tech-heavy Nasdaq Composite (^IXIC) climbed 0.1%.
The market is laboring with concerns about the health of the US economy, which have persisted after the Fed's bold pivot to cutting interest rates last week. The big question now is whether upcoming data releases this week will support Fed Chair Jerome Powell's assertion that conditions remain strong.
Read more: What the Fed rate cut means for bank accounts, CDs, loans, and credit cards
Much will depend on Friday's reading on the PCE index — the Fed's preferred inflation gauge — and Thursday's second quarter GDP print. Experts believe that cooling inflation, not a rising risk of recession, will give policymakers the green light for another 0.5% cut this year.
Investors received more policy insight from Fed officials on Monday morning. Raphael Bostic and Neel Kashkari explained why they were in favor of reducing interest rates by a jumbo 50 basis points instead of a smaller first cut, citing progress on inflation and a cooling job market.
Given the rare lack of unanimity in the last decision, remarks from Powell and dissenting Fed governor Michelle Bowman later in the week are likely to be closely scrutinized.
Among Monday's movers, Tesla (TSLA) stock rose on a bullish delivery forecast from Wall Street ahead of the EV maker's robotaxi day in October.
Intel (INTC) shares also jumped after Apollo Global Management reportedly offered to make a multibillion-dollar investment in the struggling chipmaker — a vote of confidence in its turnaround strategy.
Boeing (BA) shares rose 2% in afternoon trading after the plane manufacturer said it raised its its negotiation offer to its machinist union in an effort to put an end to its member's strike.
Live13 updates
GM stock drops on Bernstein downgrade. The problem: 'Earnings headwinds' and cost concerns.
Yahoo Finance's Pras Subramanian reports:
After a steep run-up in GM stock (GM), Bernstein analysts are warning investors to proceed with caution.
Lead autos analyst Daniel Roeska wrote in a note Monday morning that while GM shares have jumped over 85% since November of last year, there are several headwinds on the way that could dampen the stock’s run.
Bernstein downgraded GM stock to Market Perform from Outperform and cut its price target slightly to $53 from $54.50.
Read more here.
Tesla stock pops amid bullish sales forecast as robotaxi unveiling looms
Yahoo Finance's Laura Bratton reports:
Tesla (TSLA) stock is on the rise as investors await the company’s long-anticipated robotaxi debut and its third-quarter sales figures.
Shares of the Elon Musk-helmed EV company jumped over 4% on Monday. Tesla is set to finally unveil its driverless cabs on Oct. 10 after months of delays. Also in early October, the company will announce its deliveries for the third quarter. Wall Street analysts forecast sales to rise 6% from last year to about 460,000 EVs.
Read more here.
Boeing shares rise on report plane maker raised union contract offer in effort to end strike
Boeing (BA) shares jumped 2% on Monday after The Seattle Times reported the plane manufacturer raised its its contract offer to the machinists union in order to put an end to the strike.
According to the publication, the new offer, delivered this morning, would increase wages by 30% over four years, up from a prior proposal of 25%. Boeing also offered to restore an annual bonus - an item that had been removed from the prior contract offering.
Boeing shares had been hovering around 52-week lows recently after the International Association of Machinists and Aerospace Workers (IAM) went on strike demanding higher salary increases.
Republicans move to avert a government shutdown — and defy Trump in the process
Yahoo Finance's Ben Werschkul reports.
House Republicans are set to bend to political realities this week and avert a government shutdown after weeks of false starts and campaign trail interference from Donald Trump.
The new plan, released Sunday, could be up for a vote as early as Wednesday. It would keep the government open until Dec. 20 and provide other provisions such as an additional $231 million for the Secret Service.
Read more here.
BofA becomes the latest big bank to bet on new branches
Yahoo Finance's David Hollerith reports on why banks are making new bets on physical branches:
Bank of America (BAC) said Monday it will open 165 branches by the end of 2026, the latest big US lender to announce more brick-and-mortar locations following a decade of industry retrenchment.
Rival JPMorgan Chase (JPM), which currently has the largest US bank branch network in the country, earlier this year pledged to open 500 new locations by 2027.
The reason some banks are making new bets on physical branches is that they now view the locations as ways to grab new wealth management and small-business customers without making acquisitions of rivals that might not pass muster with antitrust regulators, according to some industry observers.
Read more here.
Analyst downgrades Microsoft stock, saying it's 'beholden' to Nvidia
Microsoft (MSFT) received a rare Wall Street downgrade on Monday over concerns the tech giant is too reliant on Nvidia for its artificial intelligence infrastructure, while competition has "caught up" to its AI lead.
Analysts at D.A. Davidson downgraded the stock to Neutral from Buy, keeping their price target unchanged at $475.
The firm noted that Microsoft's early investments and commercial product rollouts initially gave the company an advantage over Amazon and Google who were both "caught flat-footed."
"Since then, Amazon and Google, AWS [Amazon Web Services] and GCP [Google Cloud Platform] respectively have invested in catching up to Microsoft, and we think you can start telling that they've caught up," Gil Luria, managing director at D.A. Davidson told Yahoo Finance on Monday.
Read more here.
Trump media stock tanks 6%, reaches new low
Trump Media & Technology Group (DJT) stock dropped another 6% on Monday to touch another low after the company’s six-month lock-up period expired last week.
Shares are down roughly 15% since last Thursday when former President Donald Trump and other stakeholders were legally allowed to sell their stock for the first time since the company went public earlier this year.
Despite recent reassurances from Trump that he wouldn't sell any of his stake, shares of the social media company have declined to their lowest level since their March debut.
“I have absolutely no intention of selling,” Trump told reporters at a press conference prior to the lock-up period expiration. “I love it. I use it as a method of getting out my word.”
The stock has been volatile, often moving in tandem with any development related to the Republican presidential candidate.
Intel stock jumps after report of possible Apollo investment
Yahoo Finance's Laura Bratton reports:
Intel stock (INTC) popped more than 4% Monday following a Bloomberg report of a potential multibillion-dollar investment from Apollo Global Management. (Disclosure: Yahoo Finance is owned by Apollo Global Management.)
The private equity firm has offered to invest up to $5 billion in Intel, Bloomberg reported, adding that Intel executives are weighing the offer. The news follows closely on the heels of multiple reports that the chipmaker is considering a friendly takeover by another chip giant, Qualcomm (QCOM).
Read more here.
Fed's Bostic and Kashkari explain why they supported a jumbo rate cut
Yahoo Finance's Jennifer Schonberger reports:
Two Federal Reserve officials explained why they were in favor of reducing interest rates by a jumbo 50 basis points instead of a smaller first cut, citing progress on inflation and a cooling job market.
Those twin developments "have emerged much more quickly than I imagined at the beginning of the summer," Atlanta Fed president Raphael Bostic said in a speech.
"In this moment, I envision normalizing monetary policy sooner than I thought would be appropriate even a few months ago."
Read more here.
Economic output steady in September, election uncertainty weighs on business confidence
S&P Global's flash US composite PMI came in at 54.4 in September, down from 54.6 in August. Economists had expected the index, which captures activity in both the services and manufacturing sectors, to tick down slightly.
The services component of S&P's report showed the index registered 55.4 this month, down from 55.7 in August. Meanwhile, manufacturing activity continued to lag, falling to a reading of 47 from 47.9 the month prior and hitting a 15-month low.
Any reading above 50 for these indexes represents expansion in the sector; readings below 50 indicate contraction.
“The early survey indicators for September point to an economy that continues to grow at a solid pace, albeit with a weakened manufacturing sector and intensifying political uncertainty acting as substantial headwinds," Chris Williamson, the chief business economist at S&P Global Market Intelligence, wrote in the release.
The survey's future output index, which, measures optimism about the output in the year ahead, hit its lowest level since October 2022.
“Business sentiment, demand, hiring and investment are being subdued by uncertainty surrounding the Presidential Election, casting a shadow over the outlook for the year ahead at many firms," Williamson wrote.
Tesla stock up 3% as shares continue steady recovery
Tesla (TSLA) shares were up more than 3% on Monday morning following positive Wall Street commentary on the electric vehicle maker.
The stock has seen a steady recovery over the past month, up about 15% since the start of September.
Tesla will be holding its highly anticipated robotaxi event on Oct. 10.
Stocks open slightly higher as S&P 500, Nasdaq rise
The major averages opened slightly higher on Monday. The Dow Jones Industrial Average (^DJI) was relatively flat following a record close on Friday. The S&P 500 (^GSPC) rose roughly 0.2%, while the tech-heavy Nasdaq Composite (^IXIC) climbed 0.3%.
Last week, the markets closed out with gains after the Federal Reserve cut interest rates by 50 basis points.
Investors will pay close attention to Friday's reading on the PCE index — the Fed's preferred inflation gauge — and Thursday's second quarter GDP print. Those prints could give clues on whether policymakers will cut another 0.5% this year.
Minneapolis Fed president Neel Kashkari released an essay on Monday on why he supported cutting interest rates last week. He argued monetary policy is still too tight.
Fed’s Kashkari says cutting rate was right decision, still sees monetary policy as 'tight'
Minneapolis Fed president Neel Kashkari released an essay on Monday on why he supported cutting interest rates last week and argued monetary policy is still too tight.
Kashkari wrote, "Cutting the policy rate by 50 basis points last week was the right decision — one that reflects both the substantial progress we’ve made in lowering inflation and also the softening of the labor market."
His comments follow the Federal Open Market Committee’s decision to cut interest rates by 50 basis points last Wednesday.
“While there remain mixed signals about the underlying strength of the U.S. economy, and I remain uncertain just how tight policy is, I do believe policy remains tight today,” wrote Kashkari.
