Stocks ended lower Wednesday trading, as investors adjusted to a new reality of lower interest rates in key markets around the world that could test risk sentiment over the coming months.
The Dow Jones Industrial Average lost 293.47 points, or 0.70%, to end the session at 41,914.75, while the S&P 500 slipped 0.19% to 5,722.26 and the tech-heavy Nasdaq edged up 0.04% to finish the day at 18,082.21
Updated at 1:12 PM EDT
Gimme Five
The U.S. Treasury sold $70 billion in new 5-year notes at a high yield of 3.519%, around 15 basis points lower, and thus more expensive, than during a similar auction last month.
Investors placed bids worth $166.6 billion for the total sale, generating a so-called bid-to-cover ratio of 2.38, a tally that is largely in-line with the recent six-auction average.
Foreign central banks, despite the higher costs, took down around 70.3% of the sale, again topped the six-auction average of around 68%.
🚨 NEW MACRO DATA:
— MTS Insights (@MTSInsights) September 25, 2024
🇺🇸 Sep 25 13:00
• 5-Year Note Auction: 3.519% (prev: 3.645%)
US 5-Year Note auction yields dropped to 3.519% from 3.645%, signaling a potential shift towards dovish sentiment as the Fed begins its easing cycle. This could put downward pressure on longer-term…
Updated at 11:07 AM EDT
Hurricane Helene
The National Hurricane Center has upgraded its assessment of Tropical Storm 9 as it barrels towards the Florida panhandle, naming it Hurricane Helene and warning of "life-threatening storm surges, damaging winds, and flooding rains" for a large portion of the state and the broader Southeastern U.S.
"A turn toward the north and north-northeast with an increase in forward speed is expected later today through Thursday, brining the center of Helene across the eastern Gulf of Mexico and to the Florida Big Bend cost by Thursday evening," the NHC said. "After landfall, Helene is expected to slow down and turn toward the northwest over the southeastern United States Friday and Saturday.
11AM EDT Sep 25: #Helene becomes a Hurricane. Helene is expected to bring life-threatening storm surge, damaging winds, and flooding rains to a large portion of Florida and the southeast U.S. Make sure to stay up to date with the latest forecast as we move throughout the event at… pic.twitter.com/aiDCNlravO
— National Hurricane Center (@NHC_Atlantic) September 25, 2024
Updated at 10:39 AM EDT
Oil slick
U.S. crude stocks fell to the lowest levels in more than two years last week, Energy Department data indicated, as overall inventories declined by a bigger-than-expected 4.5 million barrels to an overall tally of 413 million barrels.
WTI crude futures for November delivery, which are tightly-linked to U.S. gas prices, pared earlier declines following the data release and were last marked $1.07 lower on the session at $70.49 per barrel.
EIA, week ending 9/20
— Patrick De Haan ⛽️📊 (@GasBuddyGuy) September 25, 2024
Crude oil: -4.5M
Domestic prod: 13.2MMbpd
Cushing: +0.1M
Gasoline: -1.5M
Mogas supplied: 9.21MMbpd
Distillates: -2.2M
Refiner utilz: 90.9%
Ref inputs: 16.35MMbpd
Total exports: 10.66MMbpd
GasBuddy mogas demand: 8.65Mbpd (wk end 9/21)#oil #OOTT #eia
Updated at 9:34 AM EDT
Mixed open
The S&P 500 was marked 4 points, or 0.08% higher in the opening minutes of trading, with the Nasdaq slipping 2 points, or 0.01%.
The Dow, meanwhile, was marked 50 points higher while the mid-cap Russell 2000 edged 1 point lower from last night's close.
S&P 500 Opening Bell Heatmap (Sept. 25, 2024)$SPY +0.05%🟩$QQQ -0.03%🟥$DJI +0.05%🟩$IWM -0.52%🟥 pic.twitter.com/cqIUH1ypz6
— Wall St Engine (@wallstengine) September 25, 2024
Updated at 8:01 AM EDT
Mortgage boost
Mortgage rates fell to the lowest levels in two years last week, data from the Mortgage Bankers' Association indicated, extending the longest consecutive stretch of declines since 2018 into 2019.
The benchmark 30-year fixed rate fell 2 basis points to 6.13% last week, the same day the Federal Reserve slashed its Federal Funds Rate by half a percentage point to 4.875%. With more Fed cuts in the pipeline, mortgage rates are likely to tumble further, and dip below the 6% level as early as this week.
MBA Mortgage Market Index - best since July 2022 pic.twitter.com/drbLSUtl3m
— Mike Zaccardi, CFA, CMT 🍖 (@MikeZaccardi) September 25, 2024
Stock Market Today
Stocks ended higher on Wall Street yesterday, with the S&P 500 notching its 41st closing high of the year, as a late-session surge for Nvidia (NVDA) helped offset concerns about fading consumer sentiment in the world's biggest economy.
The Conference Board's closely tracked reading showed the biggest month-on-month decline in three years. Respondents noted underlying concern about the labor market and added to bets on another outsized Federal Reserve rate cut later this autumn.
The CME Group's FedWatch tool, in fact, pegs the odds of a 50-basis-point cut in November at around 58.1%, up from just 37% a week ago, while rate-sensitive 2-year-note yields continue to slide and were last marked at 3.533% in overnight trading.
Rate-cut signals from the European Central Bank, as well as a third day of reductions in China and talk of policy patience from the Bank of Japan earlier this week, laid the groundwork for an easier monetary backdrop heading into the final months of the year, but added to global growth concerns at the same time.
That's helping lift gold prices to another record high in the overnight session, while putting modest pressure on most global stock benchmarks, including those on Wall Street.
Related: Goldman Sachs shifts view on economy, Fed rate cuts
Futures contracts tied to the S&P 500 suggest a 9 point pullback to start the trading day, with the Dow Jones Industrial Average called 25 points higher from last night's record close.
The tech-focused Nasdaq, meanwhile, is called 70 points lower, with Nvidia, Tesla (TSLA) and Intel (INTC) marked red in premarket dealing and Micron Technology (MU) edging 0.26% higher ahead of its fiscal-fourth-quarter earnings report after the closing bell.
More Wall Street Analysts:
- Analyst says Intel should drop a key business to survive
- Analysts adjust Bookings.com stock price target on travel market
- Analysts place bets on Las Vegas strip casino stocks
In Europe, the regionwide Stoxx 600 was marked 0.14% lower in early Frankfurt trading, while Britain's FTSE 100 edged just 0.065% higher as the stronger pound put pressure on export stocks.
Overnight in Asia, China shares added to yesterday's gains after the People's Bank of China cut a key bank lending rate by 300 basis points, the most on record, as the government doubles down on its hefty stimulus effort in the world's second-largest economy.
The regional MSCI ex-Japan benchmark rose 0.32% into the close of trading while the Nikkei 225 ended 0.19% lower in Tokyo.
Related: Veteran fund manager sees world of pain coming for stocks
