Wall St dips on weak sentiment data, while miners shine
The benchmark S&P 500 and the Nasdaq have slipped, as investors digested a weak consumer confidence report and mulled on the Federal Reserve’s next policy move, while mining stocks got a boost after China unveiled a sweeping stimulus package.
A Conference Board report showed an index tracking consumer confidence stood at 98.7 in September, compared with estimates of 104 as per economists polled by Reuters. The index was revised to 105.6 for the month before.
Rate-sensitive growth stocks such as Amazon.com, Meta and Microsoft lost over one per cent each following the data as yield on short-term Treasury bonds were steady.
Still, the benchmark S&P 500 and the blue-chip Dow were hovering near record highs as data earlier in the week pointed to a robust economy overall, and as a number of policymakers supported further policy easing by the Fed.
In early trading on Tuesday, the Dow Jones Industrial Average rose 6.17 points, or 0.02 per cent, to 42,133.64, the S&P 500 lost 9.20 points, or 0.17 per cent, to 5,708.95 and the Nasdaq Composite lost 38.86 points, or 0.22 per cent, to 17,935.41.
The Russell 200 index, tracking small caps, gained 0.3 per cent.
Seven out of the 11 S&P 500 sectors trended downwards, although material stocks outperformed peers with a 1.1 per cent rise.
Metal prices got a boost after the world’s second-largest economy, China, unveiled its biggest stimulus since the pandemic to pull the economy out of its deflationary funk.
Copper and lithium miners such as Freeport-McMoRan added 5.9 per cent, Southern Copper rose 7.1 per cent and Albemarle advanced 4.2 per cent and Arcadium climbed 5.8 per cent.
Striking some caution, Fed Governor Michelle Bowman cautioned that key measures of inflation remained “uncomfortably above” the Fed’s two per cent target, warranting caution as the Fed proceeds with cutting interest rates.
Market pricing for the Fed’s November decision is reduced to a coin toss, with bets neither strongly favouring a 50 bps nor a 25 bps reduction, as per the CME Group’s FedWatch Tool.
“Between now and the time the Fed meets, we’ll have a couple of jobs reports. They’ve told us unemployment now is the thing that’s driving rate cut decisions. The soft landing is when unemployment doesn’t start skyrocketing,” said Kim Forrest, chief investment officer at Bokeh Capital Partners.
Later in the week, investors will parse weekly jobless claims and personal consumption expenditure data.
The three main indexes are set for monthly gains and defy the historical trend of September being a weaker month for equities, after the Fed commenced its easing cycle last week, sparking a market rally.
Among stocks, US-listed shares of Chinese firms such as Alibaba rose 5.3 per cent, PDD Holdings added 6.4 per cent and Li Auto advanced 7.8 per cent, tracking gains in the domestic market.
Visa lost four per cent after a report showed the US Department of Justice plans to file a lawsuit against the payments network operator, alleging that it illegally monopolised the country’s debit card market.
It weighed on the financial sector that slipped 0.6 per cent.
Advancing issues outnumbered decliners by a 1.62-to-1 ratio on the NYSE and by a 1.3-to-1 ratio on the Nasdaq.
The S&P 500 posted 34 new 52-week highs and no new lows, while the Nasdaq Composite recorded 53 new highs and 45 new lows.
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