U.S. stocks nudged higher into the close of trading, but ended mixed following a muted session that underscored broader market concerns over the health of the world's biggest economy and the near-term path of Federal Reserve interest rates.
Bond markets were far more active on the session, with benchmark 10-year note yields retreating to 3.757%, some 7 basis points lower on the day around 14 basis points south of last Friday's closing levels.
The moves in part reflected both the softer-than-expected July Jolts data, which showed the fewest amount of job openings since January of 2021, and yesterday's ISM manufacturing activity survey which continues to indicate contraction heading into the autumn months.
Bets on an outsized 50 basis point rate cut from the Fed later this month in Washington jumped to around 45%, while 2-year note yields eased to 3.760% to reflect the market's bearish rate projections.
Stocks were largely muted, however, with the S&P 500 closing 9 points lower, or 0.16%, while the Nasdaq fell 52 points, or 0.2%. The Dow, meanwhile, added 38 points by the close of trading.
Wall Street's focus is now likely to shift to a quartet of labor market data releases over the next two days, with Challenger Gray's August layoffs report, payroll processing group ADP's national employment report and the Labor Department's weekly jobless claims figures, all of which will arrive before the Thursday opening bell.
The Bureau of Labor Statistics will also publish its August non-farm payroll report before the market opens on Friday.
"In the event of a horrible August payroll report and surging unemployment, it is possible that the Fed might cut key interest rates 0.5% on September 18th, but since the Fed does not like to “panic,” a 0.25% key interest rates cut is still more likely," said Louis Navellier of Navellier Calculated Investing.
"However, a dovish FOMC statement and an updated “dot plot” that forecasts future key interest rate cuts will likely be scrutinized and influence financial markets. The Fed’s key interest rate cuts will act as a “turbo boost” to the U.S. economy," he added.
S&P 500 Closing Bell Heatmap (Sept. 04, 2024)$SPY -0.16%🟥$QQQ -0.30%🟥$DJI +0.09%🟩$IWM -0.19%🟥 https://t.co/c3ivc2i8xR pic.twitter.com/hdij1Bbc9x
— Wall St Engine (@wallstengine) September 4, 2024
Updated at 3:11 PM EDT
Nvidia probe
Nvidia shares have been rolling in and out of positive territory for much of the session, and were last marked 2.2% lower at 105.67 each, following reports of a DoJ probe into the group AI semiconductor business.
Nvidia has pushed back against the DoJ claims, which reportedly includes an investigation into its April purchase of RunAI, saying it "wins on merit" and doesn't pin clients into contracts or prevent them from moving to rival chip suppliers.
Related: Nvidia stock extends $280 billion slump after DoJ probe report
Updated at 12:19 PM EDT
Dollars down
Dollar Tree (DLTR) shares plunged to the lowest levels in nearly a decade after lower in early trading after the discount retailer slashed its profit forecast following a weaker-than-expected second quarter update.
"Customers are expanding their consumption on low-margin essentials while contracting their spending on discretionary items because of macro belt-tightening," finance chief Jeff Davis told investors, adding that full-year earnings are likely to range between $5.20 to $5.60 per share, a $1.40 reduction from the upper end of its earlier forecast.
Dollar Tree shares were last marked 20.6% lower at $64.85 each, the lowest in at least four years and near to levels last seen in 2014.
Find out why Dollar Tree is crashing today: https://t.co/WeE9SiFxhK
— iPick.ai (@iPick_ai) September 4, 2024
Year to date, Dollar General is down 42%, and Dollar Tree is down 54%. https://t.co/7c884tLIOu
Is this a buying opportunity for either $DLTR or $DG? Conduct your own research at https://t.co/sCVooUqhtu. https://t.co/RwgDK3ZIn2 pic.twitter.com/dHFH1ZC17p
Updated at 10:03 AM EDT
Jolted
Job openings fell notably in July, according to the U.S. Bureau of Labor Statistics' Jolts report, with 7.673 million positions left unfilled, down from the 7.91 million tally recorded in August and firmly inside the Street consensus forecast of 8.09 million.
JOLTS lowest since Jan 2021 pic.twitter.com/ry0yro00nU
— Mike Zaccardi, CFA, CMT 🍖 (@MikeZaccardi) September 4, 2024
Updated at 9:48 AM EDT
Mixed open
The S&P 500 was marked 7 points, or 0.16% lower in the opening minutes of trading, while the Nasdaq fell 77 points, or 0.45%.
The Dow was marked 92 points higher while the Russell 2000 slipped 7 points, or 0.35%.
S&P 500 Opening Bell Heatmap (Sept. 04, 2024)$SPY -0.16%🟥$QQQ -0.52%🟥$DJI +0.12%🟩$IWM -0.26%🟥 pic.twitter.com/LSjFZPnK8X
— Wall St Engine (@wallstengine) September 4, 2024
Updated at 9:09 AM EDT
Steely resolve
U.S. Steel (X) shares were active in premarket trading, rising 1.3% following a statement from the group that indicated employee support for its $14.7 billion takeover by Nippon Steel.
"We want elected leaders and other key decision makers to recognize the benefits of the deal as well as the unavoidable consequences if the deal fails," said CEO Dave Burritt ahead of a rally at the U. S. Steel Tower in Pittsburgh.
The rally follows comments from both Vice President Kamala Harris, and her presidential challenger Donald Trump, which suggested their administrations would seek to block the agreed takeover.
Looks like $X management is ready to play hardball. Makes sense if you really believe in the merits of the deal. pic.twitter.com/CidZ2mpGA0
— BAT (@BATMongoose) September 4, 2024
Stock Market Today
Stocks on Tuesday suffered their biggest decline since the early August meltdown and their second-largest decline of the year. Tech stocks slumped amid a $280 billion decline for AI-chip maker Nvidia (NVDA) and a reversal of August's risk sentiment.
Related: Nvidia stock extends $280 billion slump after DoJ probe report
A weaker-than-expected reading for U.S. manufacturing activity added to the broader market caution. So did a sustained rally in the bond market, which pushed 10-year U.S. Treasury yields to 3.823% in overnight trading, some 10 basis points (0.1 percentage point) lower than their end-August close.
CBOE Group's VIX index, the market's benchmark volatility gauge, surged more than 40% over the session and gained another 36% in after-hours trading, as investors rushed to purchase downside protection for their portfolios.
Getty
The VIX was last marked at $22.65, a level that suggests traders are expecting daily swings of around 1.41%, or 78 points, for the S&P 500 over the next month.
Investors are now braced for a series of labor-market data releases over the next three days, starting with the July Jolts report of job openings and quits rates at 10 a.m. U.S. Eastern Time.
Payroll-processing group ADP will publish its private employment report for the month of August Thursday while the Labor Department will release its crucial August nonfarm-payrolls report the following day.
Related: Fed rate cuts may not guarantee a September stock market rally
On Wall Street, futures tied to the S&P 500, which fell nearly 120 points during yesterday's session, are priced for an 18-point opening bell decline.
Futures tied to the Dow Jones Industrial Average, meanwhile, are called 96 points lower while the Nasdaq is looking at a 100-point pullback.
More Wall Street Analysts:
- Analysts reboot Grand Theft Auto maker's stock price target
- American Express stock analyst flags concerning shift in consumer behavior
- Analyst resets Nvidia stock price target before earnings
In overseas markets, European stocks were notably lower following last night's selloff on Wall Street, with the Stoxx 600 down 0.86% in Frankfurt and the FTSE 100 down 0.6% in London.
Overnight in Asia, the Nikkei 225 slumped 4.24% in Tokyo as markets effectively tracked last night's final hour on Wall Street, while the regional MSCI ex-Japan benchmark fell 1.85% into the close of trading.
Related: Veteran fund manager sees world of pain coming for stocks
