Stocks slipped on Monday as Wall Street struggled to keep the momentum from Friday’s rally.
The Dow Jones Industrial Average dropped 190 points, or 0.5%. The S&P 500 slid 0.3%, and the Nasdaq Composite shed 0.3%.
Adding pressure to stocks was an uptick in U.S. Treasury yields. The benchmark 10-year Treasury yield rose nearly 3 basis points to 4.008%. That marks the first time since August that the yield topped 4%.
Higher oil prices also weighed, as tensions in the Middle East remain high. U.S. crude climbed more than 2% to more than $76 per barrel.
The moves come after a bumpy week for stocks that saw the major averages grind out modest gains. The S&P 500 added 0.2% for the week, while the Nasdaq Composite inched up 0.1% and the Dow added 0.1%.
It was the fourth winning week in a row for all three averages, helped by a stronger-than-expected jobs report on Friday that gave more support to the idea that the Federal Reserve may pull off a “soft landing” for the U.S. economy. The Dow closed at a record high after the report.
“Two old adages on Wall Street: don’t fight the trend and don’t fight the Federal Reserve. … These remain among two key pillars for today’s equity market,” Truist Wealth co-chief investment officer Keith Lerner said in a note Friday.
However, Lerner did caution that the looming U.S. presidential election and the potential for so-called “October surprise” could keep market volatility elevated in the coming weeks.
On the economic front, key releases in the week ahead include the Federal Reserve meeting minutes on Wednesday and the consumer price index report on Thursday. Earnings season also starts to heat up, with results from Delta Air Lines and JPMorgan Chase due out Thursday and Friday, respectively.
Stocks open lower to kick off trading week
Stocks making the biggest moves before the bell: Apple, Amazon and more
These are the stocks moving the most in premarket trading:
- Apple — Shares declined 1.4% after Jefferies downgraded the megacap tech company to hold from buy, saying near-term expectations for the iPhone 16 and 17 are too high after weaker-than-expected initial demand.
- Amazon — Shares slumped nearly 2% after Wells Fargo downgraded the e-commerce company to equal weight from overweight, citing slowing growth and competition from Walmart.
- Pfizer — Activist investor Starboard Value took a roughly $1 billion stake, seeking a turnaround at the struggling company, sources told CNBC. Shares rose nearly 3% on the news.
Read the full list of stocks moving here.
— Hakyung Kim, Lisa Kailai Han
Oppenheimer maintains year-end S&P 500 target of 5,900
In a Monday note, Oppenheimer Asset Management reiterated its bullishness on equities and maintained its S&P 500 year-end target of 5,900.
This target is approximately 2.6% higher than where the broad market index closed at 5,751.07 on Friday.
“Pull-backs experienced thus far this year have mostly looked like ‘trims’ and ‘haircuts’ for the S&P 500 whenever bears, skeptics, and nervous investors have found a catalyst to take near-term profits without FOMO (fear of missing out) midst what appears to us like a very much intact bull market,” wrote chief investment strategist John Stoltzfus. “Drivers of the bull market that in our view have provided resilience in the intermittent downdrafts that have occurred this year include: The success the Fed has had over the course of 20 FOMC meetings along with resilient earnings has provided support for the US economy and the markets thus far this year.”
— Lisa Kailai Han
Goldman Sachs cuts 12-month recession odds to 15%
Given Friday’s strong reading of the September jobs report, Goldman Sachs chief economist Jan Hatzius cut his 12-month U.S. recession probability back to his long-term average of 15%. He had previously raised this after the jump in unemployment rate from June to July.
“The most important reason is that the unemployment rate fell to 4.051% in September, marginally below both the June level and the threshold that activates the ‘Sahm rule.’ Moreover, with nonfarm payroll growth of 254k surprising sharply to the upside, prior months revised higher, and household employment also solid, we now estimate an underlying jobs trend of 196k, well above our pre-payrolls estimate of 140k and modestly above our estimated ‘breakeven rate’ of 150-180k,” Hatzius wrote.
The economist added that fundamental upward pressure on the unemployment rate may have ended due to weaker labor supply growth and stronger labor demand growth.
— Lisa Kailai Han
Pfizer rises after Starboard Value takes $1 billion stake
Pfizer shares were up more than 3% in the premarket after sources told CNBC that activist Starboard Value has taken a $1 billion stake in the pharmaceutical giant.
— Fred Imbert
10-year Treasury yield tops 4%
Treasury yields continued rising Monday, with the benchmark 10-year rate topping 4% for the first time since August. The 10-year Treasury yield was last up nearly 3 basis points at about 4.01%. The 2-year note yield was also nearly 7 basis points higher at around 4%.
— Fred Imbert
Japan leads gains in Asia markets; Hong Kong set to close above 23,000 for first time since February 2022
Asia-Pacific markets mostly climbed on Monday, led by Japan’s Nikkei 225 rising 1.8%, powered by financials and consumer cyclical stocks, and closed at 39,332.74.
Shares of video gaming company Nintendo climbed almost 5% on Monday, after Saudi Arabia’s sovereign wealth fund was reported to be considering raising its stake in the company.
Hong Kong’s Hang Seng index climbed 1.4% in its final hour of trade. The HSI briefly passed the 23,000 mark on Monday, and if it closes above that level it would be the first time since February 2022.
— Lim Hui Jie
Arcadium Lithium confirms approach from Rio Tinto about potential deal
Arcadium Lithium on Sunday evening confirmed that Rio Tinto has approached the company about a potential acquisition.
“The approach is non-binding and there is no certainty that any transaction will be agreed to or will proceed. Arcadium Lithium will not comment further unless and until there is news to share,” the press release said.
Shares of Arcadium surged in after hours trading on Friday after Reuters reported that the two companies were talking about a potential deal.
— Jesse Pound
Key earnings reports later this week
Several major companies are set to report their quarterly earnings this week, including some financial giants. Here’s a look at the earnings schedule for the coming days:
Tuesday: Pepsico
Thursday: Delta, Domino’s Pizza
Friday: BlackRock, Bank of NY Mellon, JPMorgan Chase, Fastenal, Wells Fargo
— Jesse Pound
Stock futures open little changed
Stock futures were little changed when trading began at 6 p.m. in New York. The three major contracts were all within 0.1% of the flat line.
— Jesse Pound
