4:13pm: Amazon shares rise on AI investment
The Dow closed Monday up 43 points, 0.1%, at 34,007, the Nasdaq Composite added 60 points, 0.5%, to 13,271 and the S&P 500 climbed 17 points, 0.4%, to 4,337. The small-cap Russell 2000 index improved 5 points, 0.3%, to 1,781.
After an up-and-down session, the Nasdaq and S&P each managed to snap four-day losing streaks.
Investors grappled with the 10-year Treasury yield, which reached 4.54%, its highest level since it hit 4.57% in 2007. Meanwhile, shares of Amazon were lifted by a $4 billion investment in artificial intelligence firm Anthropic.
“We got interest rates, very negative, AI, very positive,” said Jay Hatfield, chief executive officer at Infrastructure Capital Management. “The two are meeting in the middle and we’re going nowhere.”
12:00pm: Stocks recoup losses after weak start
US stocks rallied as recent heavy falls in equities attracted some bargin hunting from investors.
At midday, the Dow Jones Industrial Average was down 7.39 points at 33,956.45, the S&P 500 was up 11.21, 0.3%, at 4,331.27 while the Nasdaq Composite rose 41.26 points, 0.3%, at 13,253.07.
Technology stocks led the rebound with Apple, up 0.8%, and Nvidia, up 1.6%, among the big names in the green.
Amazon's $4 billion into artificial intelligence start-up Anthropic continued to support shares which rose 1.5%.
Long-term treasury yields climbed to fresh multi-year highs as investors continued to fret about the prospect of a lengthy period of high US interest rates.
Yields on the benchmark 10-year US Treasuries rose 0.09 percentage points to 4.53%, their highest level in 16 years, while yields on the 30-year note were up 0.12 percentage points to 4.65%, their highest level since 2011.
"A fresh climb in yields only adds to the stock market’s woes, as investors come to realise that when Powell says ‘higher for longer’, he really means it," said Chris Beauchamp, at online trading platform IG.
9:40am: Growth concerns resurface
US stocks slipped on Monday as concerns about economic growth in the US and China ensured a risk-off mode on Wall Street.
Shortly after the opening bell, the Dow Jones Industrial Average was down 67.26 points, 0.2% at 33,896.58, the S&P 500 was down 12.54 points, 0.3%, at 4,307.52 while the Nasdaq Composite was down 58.20 points, 0.4%, at 13,153.60.
US economic growth slowed in August as industrial activity moderated, data from the Federal Reserve Bank of Chicago showed.
The Chicago Fed National Activity Index fell to minus 0.16 in August from a revised 0.07 in July. A reading below zero suggests economic activity is expanding at a slower rate than its average historical trend.
United States Chicago Fed National Activity Indexhttps://t.co/M4j5btNttf pic.twitter.com/IldESYAgkv
— TRADING ECONOMICS (@tEconomics) September 25, 2023
The CFNAI index, designed to gauge overall economic activity and inflationary pressures, is composed of 85 economic indicators from four broad categories of data: production and income; employment, unemployment and hours; personal consumption and housing; and sales, orders and inventories.
All four categories dragged the indicator down in August, albeit at different degrees of strength.
The news followed renewed concerns that China's property sector could slow growth in the world's second largest economy which had been a beacon of hope heading into 2023.
“China is set to go down in history as being 2023’s biggest disappointment for investors," according to AJ Bell's Russ Mould.
"Having started the year in everyone’s good books amid expectations of a big economic rebound, the Asian superpower has failed to deliver," he explained.
7:00am: Subdued start expected on Wall Street
US stocks are expected to edge lower when trading begins on Monday as investors weigh up the latest concerns over the health of China’s property sector, which adds to worries that global economic growth is slowing.
In pre-market trading, futures for the Dow Jones Industrial Average were 0.1% lower, while those for the S&P 500 fell 0.1%, and contracts for the Nasdaq 100 futures were down 0.2%.
Shares in the embattled Chinese property developer Evergrande slumped 22% following the announcement that it would be unable to carry out a restructuring plan intended to guarantee its survival.
The frim cannot “meet the qualifications for the issuance of new notes”, as its principal subsidiary, Hengda Real Estate Group, is being investigated, it said in a Hong Kong stock exchange filing on Sunday.
Elsewhere, Amazon plans to invest up to $4 billion in artificial intelligence start-up Anthropic, as the big tech group steps up its rivalry with Microsoft, Google and Nvidia to get AI companies using its technology.
The deal, announced on Monday, will see Amazon invest an initial $1.25 billion for a minority stake in Anthropic.
Both companies will later have the option to increase the total to $4 billion, they said.
Shares of Disney, Paramount and Warner Bros. Discovery were higher in premarket after Hollywood writers and studios reached a tentative deal that would end the Writers Guild of America’s strike.
Disney rose 1.2%, while Paramount and Warner Bros. Discovery gained 3.5% and 4.1%, respectively.