Stock market today: Dow, S&P 500, Nasdaq slip as rising bond yields offset Micron earnings
US stocks kicked off the first day of October lower as investors eyed softer-than-expected manufacturing readings amidst bond market tumult and a cooling of the AI trade.
The Dow Jones Industrial Average (^DJI) fell 0.7%, and the S&P 500 (^GSPC) and tech-heavy Nasdaq Composite (^IXIC) slipped 0.3% and 0.4%, paring earlier Thursday gains.
The 10-year Treasury yield (^TNX) rose another 3 basis points Thursday to 5.3%, a new multidecade high after the bond market suffered its worst quarter in decades.
50,668.60 -237.45 (-0.47%)
As of 11:47:29 AM EDT. Market Open.
^DJI ^GSPC ^IXIC
Stocks slipped Thursday after two fresh readings of manufacturing activity highlighted growing price pressures in the US heated up in September.
Micron (MU) shares themselves were little changed after the memory giant reported fourth quarter earnings that beat Wall Street’s expectations and raised its Q1 outlook.
Stocks closed out the third quarter and the historically weak month of September on Wednesday. The Dow posted losses for both periods as US bond yields saw their biggest move since September 2022, while the Nasdaq rose.
The markets’ momentum has flagged, as much of the market remains encumbered by uncertainty amidst persistently high Treasury yields and oil prices (CL=F, BZ=F) despite major tech and semiconductor stocks powering AI enthusiasm. That optimism cooled slightly Thursday with tech stocks key to the AI trade including Amazon (AMZN), AMD (AMD) and Intel (INTC) declining.
Investors also just got a new reminder of the circular ties between major AI players. Broadcom (AVGO) is lending $42 billion to AI-darling Anthropic, according to a Reuters report. In turn, Anthropic is estimated to become the chip designer’s largest compute customer by next year.
Initial jobless claims fell for the fourth week in a row in the latest sign that the labor market remains broadly stable. A report on layoff plans from Challenger, Gray & Christmas, released on Thursday morning, also showed layoff plans declined in September, though companies also aren’t rushing to hire. These labor market data reports set the tone for Friday’s monthly jobs report.
Nike (NKE) reports earnings after the bell, offering a look at how its turnaround efforts are going, but it will take a lot to change Wall Street’s sentiment on the stock, which is trading at its lowest levels since 2014.
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Initial jobless claims ticked lower last week
The number of people filing for unemployment dropped for the fourth week in a row, highlighting that the pace of firings remains low.
US jobless claims fell by 1,000 to 197,000 in the week ended Sept. 26, the Labor Department said on Thursday. That was below economists’ expectations of 200,000 claims.
Initial claims over the past year (FRED) Continuing claims, a gauge of how many people are receiving benefits, declined by 11,000 to 1.7 million in the week ended Sept. 19.
On Friday, the Labor Department will deliver its monthly employment report, considered the gold standard for jobs data.
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‘AI or bust:’ Tech trade powered stocks through volatile September
Yahoo Finance’s David Hollerith recaps how markets performed in September:
Wall Street fared better than expected in September, given the month’s historical reputation as the worst month for stocks. It largely comes down to, you guessed it, the artificial intelligence trade.
The S&P 500 (^GSPC) declined by 0.4% for the month as Treasury yields surged. It’s down 1.9% from its record high set in August. September has historically been the weakest month for the S&P 500, with an average decline of 0.6% since 1950.
Markets diverged in September The Nasdaq Composite (^IXIC) gained 1.8% after hitting a new peak on Sept. 22. Tech giants Meta (META) and AMD (AMD), along with a handful of other semiconductor stocks, drove that performance.
Meanwhile, the Dow Jones Industrial Average (^DJI) fell by about 4.3%, while the small-cap-focused Russell 2000 (^RUT) dropped by 5.4%.
“It’s AI or bust,” Interactive Brokers chief strategist Steve Sosnick said, pointing to the divergence in stock performance for the major market indexes.
