4:23pm: Nasdaq the lone index to eke out a win
The Dow closed Monday down 74 points, 0.2%, at 33,533, while the Nasdaq Composite added 88 points, 0.7%, to 13,308 and the S&P 500 rose less than 1 point to 4,288. The small-cap Russell 2000 index dipped 28 points, 1.6%, to 1,757.
The market didn't seem to respond much to Congress passing a continuing resolution over the weekend and narrowly avoiding a government shutdown, at least until mid-November.
That shouldn't come as a surprise, according to Charles Schwab senior investment strategist Kevin Gordon.
“I think the conditions that we’re in and that surround us are much more important. So, as we head into the year-end, if [we] don’t see an improvement in key areas of the economy, like housing and manufacturing, if [we] start to see more cracks on labor — I think that would that would definitely take on more importance than just the shutdown itself,” said Gordon.
12:00pm: Blue-chips volatile but tech holds firm
Stocks enjoyed mixed fortunes on Monday with tech holding firm but blue-chips falling back as the sell-off in bonds resumed after the government avoided a shutdown.
At midday, the Dow Jones Industrial Average was down 199.18 points, 0.6%, at 33,308.32, the S&P 500 was down 17.21 points, 0.4%, at 4,270.84 but the Nasdaq Composite was up 39.23 points, 0.3%, at 13,258.55.
Chris Beauchamp at online trading platform IG said: "Squabbling politicians in the US might have managed to patch up the US government’s funding position for now, but the knowledge that we will have to repeat the drama in about six weeks means that there is little positive sentiment to be found in stock markets right now."
"The traditionally-strong Q4 hasn’t got off to a flying start, though at least tech stocks have put their best foot forward.”
The US manufacturing sector contracted for the 11th consecutive month in September as soft demand for new orders weakened factory activity, but employment and production recovered.
The Institute for Supply Management said its index tracking factory activity increased to a reading of 49 last month from 47.6 in August - the highest level since November 2022 and above economists’ expectations of a reading of 47.8.
But the improving picture seemed to be taken by investors as another reason to believe interest rates would stay inflated for some time to come.
9:40am: Tech climbs in mixed start on Wall Street
Stocks made a mixed start to the week after the government avoided a shutdown, for now, and investors looked ahead to a week dominated by updates on the health of the labour market.
Shortly after the opening bell, the Dow Jones Industrial Average was down 18.13, 0.1%, at 33,489.37, the S&P 500 was little changed at 4,289.49 while the Nasdaq Composite rose 42.96 points, 0.3%, at 13,262.28.
Shares of electric vehicle maker Tesla fell 2.5% after reporting a drop in total production and delivery volumes for the third quarter, but industry rival Rivian Automotive fared betterm up 1.2% after reporting better-than-expected electric vehicle deliveries in the previous quarter.
Birkenstock plans to price its shares between $44 and $49 each in its upcoming initial public offering (IPO) in New York, seeking a valuation of up to $9.2 billion, as it presses ahead with plans for its market debut.
About 32.26 million shares will be sold in the IPO by the German sandal maker and its selling stockholders to raise $1.58 billion, according to a filing with the US Securities and Exchange Commission (SEC).
7:00am: Modest gains expected after shutdown reprieve
US stocks are expected to make cautious progress on Monday after policymakers came to a temporary agreement that staved off a government shutdown.
In pre-market trading, futures for the Dow Jones Industrial Average were flat, while those for the S&P 500 rose 0.1%, and contracts for the Nasdaq 100 futures were up 0.2%.
Ipek Ozkardeskaya at Swissquote Bank said: “The US government didn’t shut down yesterday, as US policymakers agreed on a short-term funding deal that will keep the lights on until November 17th.”
“But the new deal excludes any new aid package for Ukraine – which is a key demand from Democrats.”
“Therefore, the political headache in the US is not over, but the politicians bought themselves a couple of weeks to try to find a better solution,” she added.
Federal Reserve chair Jerome Powell is due to speak at a roundtable discussion alongside Philadelphia Fed President Patrick Harker.
Investors will be keen to hear any comments on interest rates and the state of the US economy after New York Fed boss John Williams suggested Friday interest rates should stay high for some time.
Today’s econ0mic data sees The Institute for Supply Management’s manufacturing index which is forecast to have edged up 0.3 percentage points to a reading of 47.9 from August, remaining in contractionary territory.
Another key focus for the week will updates on the health of the labour market.
JOLTS job opening figures, ADP private payrolls data and weekly jobless claims number all come before the employment report on Friday as investors assess whether the Federal Reserve’s interest rate increases are feeding slowing the so-far resilient jobs market.