Stock Market Today: Stocks Finish Lower as Treasury Yields Rise

Last Updated 4:20PM EST

Stock indices finished Today’s trading session in the red. The Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 fell 0.24%, 0.41%, and 1.02%, respectively.

The consumer discretionary sector was the session’s laggard, as it fell 1.01%. Conversely, the energy sector was the session’s leader, with a gain of 0.97%. In addition, WTI crude oil remained below $90 per barrel as it hovers around the low-$88 range.

Furthermore, the U.S. 10-Year Treasury yield remained flat at 4.052%. On the other hand, the Three-Month Treasury yield increased to 4.16%.

The Atlanta Federal Reserve updated its latest GDPNow reading, which allows it to estimate GDP growth in real time. The “nowcast” becomes more accurate as more economic data is released throughout the quarter. Currently, it estimates that the economy will expand by about 2.6% in the fourth quarter.

This is lower than its previous estimate of 3.1%, which can be attributed to recent data released from the U.S. Census Bureau and the Manufacturing ISM Report.

Nevertheless, inflation continues to be a problem around the world. Therefore, it’ll be interesting to see what the actual GDP growth will be and how it’ll change going forward as higher rates start to impact the economy.

Stocks Fall as Manufacturing Data Points to Global Slowdown

Last Updated 2:30PM EST

Stocks are in the red heading into the final 90 minutes of today’s trading session. As of 2:30 p.m. EST, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 are down 0.2%, 0.3%, and 0.8%, respectively.

More unfavorable economic data continues to be released, as the Institute for Supply Management released its monthly report for the ISM Manufacturing New Orders Index. For the month of October, new orders for the manufacturing index came in at 49.2.

It’s important to note that a reading under 50 means that new orders contracted. This is consistent with the other data that was released today that points to a slowdown in the manufacturing sector.

Unfortunately, this manufacturing slowdown isn’t limited to the U.S., as Sweden, Greece, the UK, and Canada saw Manufacturing PMI reports that were all under 50. The problem is two-fold – high inflation and rising interest rates.

Higher prices have already impacted consumer spending patterns as they shift away from discretionaries to essentials. Therefore, even more inflation will make things worse. As a result, central banks need to continue raising interest rates.

However, higher interest rates make the cost of borrowing higher, which reduces business investment and consumer spending as well. Thus, when putting all of this together, it’s not hard to see why the manufacturing sector is slowing down.

Stocks Remain Negative; Manufacturing PMI Beats Expectations

Last Updated 12:00PM EST

Stocks are in the red halfway into today’s trading session. As of 12:00 p.m. EST, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 are down 0.4%, 0.4%, and 0.7%, respectively.

Earlier today, the Institute for Supply Management released its monthly report for the ISM Manufacturing Purchasing Managers’ Index, which measures the month-over-month change in production levels. A number over 50 represents an expansion, whereas anything below 50 means a contraction. The report came in at 50.2, only slightly better than the expected 50.

It’s worth noting that this indicator is lower than last month’s reading of 50.9 and has been slowly downtrending ever since its peak in April 2021, when it hit a high of 64.7. If this trend continues, we will see production levels begin to contract very soon.

Furthermore, the ISM Manufacturing Employment report posted a reading of 50, meaning that manufacturing employment saw no change. However, it’s worth noting that manufacturing employment has contracted in four of the last six months, suggesting that companies are already anticipating a contraction in production levels.

Stocks Fall as Job Openings Beat Expectations

Last Updated 10:07AM EST

Stock indices are in the red to start today’s trading session. As of 10:07 a.m. EST, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 are down 0.2%, 0.1%, and 0.1%, respectively.

On Tuesday, the Bureau of Labor Statistics released its JOLTS Job Openings report, which helps measure job vacancies in the U.S. The number came in at 10.717 million job openings for September, above the expected 10 million.

Although lower than the peak of 11.855 million, job openings are still near their highs. In fact, today’s report is higher than last month’s reading. Nonetheless, job openings are on an overall decline and it will be interesting to see if this trend continues as rates continue to rise while growth slows down.

In addition, it’s important to remember that this data is for September, thus, making it a lagging indicator. Since then, many companies have announced that they will reduce their workforce in order to cut costs.

Futures are Up Ahead of FOMC Meeting Day 1

First Published 7:02AM EST

Stock futures are higher on Tuesday morning as the Federal Reserve prepares for the first day of its November FOMC meeting.

Futures on the Dow Jones Industrial Average (DJIA) lost 0.64%, while those on the S&P 500 (SPX) lost 0.15%, as of 6.49 a.m. EST, Tuesday. Meanwhile, the Nasdaq 100 (NDX) futures retracted 1.22%.

On Monday, the S&P 500, the Dow, and the Nasdaq ended with losses of 0.75%, 0.39%, and 1.22%, respectively.

Nonetheless, investors were upbeat after looking at the monthly performances. The Dow ended the best month since 1976 after clinching 13.95% gains for October. The other indexes also clocked out of a winning month, with the S&P 500 gaining 8% and the Nasdaq 100 gaining 3.9%.

Disappointing earnings and outlooks by some of the big tech hung heavy on the Nasdaq 100 in the past week. Meanwhile, solid earnings results of Dow members such as Caterpillar (NYSE:CAT) and McDonald’s (NYSE:MCD) bode well for the index.

Tuesday holds some very important earnings releases of the season, including those from Uber (NASDAQ:UBER), Pfizer (NYSE:PFE), Fox (NASDAQ:FOXA), Advanced Micro (NASDAQ:AMD), and Airbnb (NASDAQ:ABNB).

The November FOMC Meeting Commences

However, the highlight of the day will be the start of the Fed’s two-day November meeting, at the end of which the central bank is expected to make another three-quarter point interest rate hike.

While the hike should not come as a surprise, all eyes are likely to be on the tone of the speaker, Fed Chairman Jerome Powell, in the question and answer segment. This will give more clues as to whether the Fed is having its desired effects on the economy and might slow its pace soon, or whether it is going to stick to its aggressive policy for some more time.

More Economic Data on the Way

Additionally, September’s job openings report will also be out on Tuesday. The data will help us gauge the labor market situation. While more job additions mean well for the workforce, it will also mean that the Fed might be encouraged to keep being aggressive. A slowdown in the labor market is crucial for prices to stabilize.

More data to keep an eye for on Tuesday are September’s construction spending and October’s manufacturing report, both of which will help investors get a better look at the manufacturing sector.

China’s Factory Output Shrinks

In October, China’s factory activity reduced more than expected, reflecting the effects of the country’s staunch Covid policies and waning global demand for China-made goods. This may lead to fresh investor concerns about China’s economic outlook in the next few days, leading to another bout of sell-offs in U.S.-listed Chinese stocks.

New Sanctions on Russian Oil to Begin from December 5

Meanwhile, as oil prices continue to soar, the U.S. authorities attempted to calm the overtly anxious oil market. The Treasury Department assured oil market players that the price cap on Russian oil will not hold on ships carrying Russian oil before December 5.

For context, starting December 5, the U.S. and its allies are set to prohibit the extension of maritime services to shipments of Russian oil unless the price of oil is within a set price ceiling.

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