The S&P 500 opened up about 0.3%. The index was on track to post its first monthly decline since January, with concerns over fiscal and monetary policy, inflation, regulation in China and the ongoing pandemic all colliding to kick stocks off their bullish path. . Still, the S&P 500 has remained up more than 16% from the start of the year until the close on Wednesday.
Cyclical stocks led the way higher in September, with investors betting on higher inflation and rising rates. A surge in crude oil prices helped make the energy sector by far the best interpreter of the S&P 500. Financials also outperformed as higher Treasury yields served as a tailwind to bank profitability.
The Nasdaq has underperformed over the past month as traders shy away from growth and tech stocks that pulled the market higher last year. High-tech stocks were also hit as Treasury yields surged over the past week, as rising borrowing costs weighed on the valuations of growth companies that are heavily dependent on expectations of strong future earnings.
Even considering the decline in US stocks in recent weeks, the indices are still not far from their all-time highs. At Wednesday’s close, the S&P 500 was down about 4% from its all-time September 2 close high.
“We haven’t even had a 5% decline since October of last year. It’ll be a year. It looks a lot worse than it actually is because we haven’t had a lot of volatility since last October, September, ”Paul Schatz, president of Heritage Capital, told Yahoo Finance Live on Wednesday.
“But remember, all the reasons we’re going down – nothing is new,” he added. “You have the debt ceiling and government shutdown, Evergrande and inflation. All things known. None of these things are going to happen to the bull market or cause a recession. There is always some sort of short term thing that the market focuses on to get a pullback. We have it. I think it’s the one you’re buying with both hands over the next week or so, and I think we’re going strongly to new highs in Q4. “
Other pundits, however, were less bullish on stocks given the mix of concerns.
“We believe there are several other headwinds, not directly related to [the Fed’s asset-purchase] declining, it could weigh on the stock market for a while, ”wrote Thomas Mathews, market economist for Capital Economics on Wednesday. “Among other things, we believe its valuation is already tight enough, that there is limited room for further upward revisions to earnings estimates given how far we’ve come, and that bond yields long. term may increase for reasons other than the decrease. “
“As a result, we expect the US stock market to make fairly limited gains over the next two years,” he added.
Thursday night also marks the deadline for Congress to reach an agreement to fund the government beyond September 30, or risk a shutdown from Friday. Senate Majority Leader Chuck Schumer said the chamber would vote on legislation that would expand funding Thursday, then send the bill to the House and President Joe Biden for approval.
9:58 a.m. ET: Tesla loses China fraud case, ordered to pay $ 235,000 in damages: Bloomberg
A Beijing court ordered Tesla (TSLA) to pay $ 235,000 in damages to a Chinese driver, who sued the electric car maker for the purchase of a used Model S vehicle, according to a report from Bloomberg Thursday. The court said Tesla misrepresented the condition of the Model S vehicle sold to the Reader.
The sanction has dealt a blow to the automaker, which has faced a series of regulatory and safety issues in the United States and China in recent months. China has also been a key electric vehicle market for Tesla and its competitors.
Tesla shares were little changed but rose slightly during Thursday’s intraday trading. Stocks rose 6.2% over the past month, outperforming the S&P 500, which fell 3.5%.
9:30 a.m. ET: stocks open higher
Here’s where the top three indices were trading shortly after the opening bell:
- S&P 500 (^ GSPC): +20.09 (+ 0.46%) to 4,379.55
- Dow (^DJI): +159.03 (+ 0.46%) to 34,549.75
- Nasdaq (^IXIC): +74.79 (+ 0.55%) to 14,592.83
- Brut (CL=F): – $ 1.22 (-1.63%) to $ 73.61 per barrel
- Or (CG=F): + $ 16.00 (+ 0.93%) to $ 1,738.90 per ounce
- 10-year cash flow (^TNX): +0.2 bps for a yield of 1.541%
8:40 a.m. ET: Second quarter GDP revised to 6.7% annualized growth rate
U.S. economic output was revised up for the April-June quarter, according to the Bureau of Economic Analysis (BEA) ‘s third national GDP review.
GDP grew at an annualized rate of 6.7% in the second quarter, compared to the previously reported rate of 6.6%. The increase followed a similar upward revision in personal consumption, which rose 12.0% in the second quarter, down from the 11.9% rate posted in the previous estimate. Personal consumption represents about two-thirds of national economic activity.
“Upward revisions in personal consumption expenditure (PCE), exports and private investment in inventories were partly offset by an upward revision in imports, which are a subtraction in the calculation of GDP,” he said. the BEA said in its report Thursday.
8:35 a.m. ET: New weekly jobless claims show unexpected increase, rising for third week in a row
The number of people filing first-time jobless claims rose unexpectedly over the past week, signaling some slowing of the labor market recovery even as companies across industries sought to recruit more workers to fill vacancies. .
New jobless claims stood at 362,000 for the week ended Sept. 25, Labor Department data showed Thursday morning. That was above the 330,000 consensus economists expected, and rose from the 351,000 unrevised filings released in the previous week.
This week’s report was also the first to report on the national federal expiration of enhanced unemployment benefits, which took place on September 6. According to the latest data, just over 5 million people were claiming benefits in all programs for the week ended September 11. That compares to 11.3 million people benefiting from state and federal unemployment programs as of the end of the week of September 4.
7:21 a.m. ET Thursday: Stock futures hold gains overnight
Here’s where the markets were trading before the opening bell:
- S&P 500 Futures Contracts (ES = F): +19 points (+ 0.44%), at 4,368.75
- Dow Futures (YM=F): +144 points (+ 0.42%), at 34,409.00
- Nasdaq Futures (NQ = F): +75.25 points (+ 0.51%) to 14,815.00
- Brut (CL=F): $ -0.18 (-0.24%) to $ 74.65 per barrel
- Or (CG=F): + $ 0.30 (+ 0.02%) to $ 1,723.20 per ounce
- 10-year cash flow (^TNX): -0.8 bps for a yield of 1.5310%
6:15 p.m. ET Wednesday: Stock futures rise
Here are the main movements on the markets on Wednesday evening:
- S&P 500 Futures Contracts (ES = F): +6.5 points (+ 0.15%), at 4,356.25
- Dow Futures (YM=F): +51 points (+ 0.15%), at 34,316.00
- Nasdaq Futures (NQ = F): +22 points (+ 0.15%) to 14,761.75
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter