4:15pm: Stocks close out quarter with record gains
Wall Street closed out the month and quarter with new records as investors responded positively to Federal Reserve Chair Jerome Powell's commitment to support the economy.
At the close, the S&P 500 and Nasdaq both rose 0.4% to finish at 5,762 and 18,189 points respectively, while the Dow Jones notched another all-time high at 42,330.
3:00pm: Powell confident in inflation target
In a speech in Nashville at the annual meeting of the National Association for Business Economics, Federal Reserve Chair Jerome Powell stated that the central bank will gradually lower interest rates over time, while emphasizing that the economy remains strong.
The chair expressed confidence that inflation is moving toward the Fed’s 2% target, with current economic conditions supporting further easing of price pressures.
Powell noted that future policy decisions will depend on incoming data, and the Fed is not on a fixed course.
While inflation has moderated, some policymakers are cautious about reducing rates too quickly, as it could reignite inflationary pressures.
2:15pm: Stocks losing steam
Chris Beauchamp, Chief Market Analyst at IG, notes that markets are closing the month in negative territory as the impact of China's recent stimulus fades. Investors are now turning their focus to the upcoming payroll data this week.
“Stocks have shed some ground so far in the final session of September, with last week’s Chinese stimulus measures failing to turbocharge indices in the US and Europe," Beauchamp commented.
"Today’s speech from Jerome Powell and the job reports this week may well keep risk appetite in check, and with the US election still on a knife edge investors aren’t short of reasons to stay cautious.”
1:35pm: AT&T exits entertainment
AT&T Inc (NYSE:T, ETR:SOBA) is selling its remaining 70% stake in DirecTV (NASDAQ:DTV) (DirecTV (NASDAQ:DTV)) to private equity firm TPG for approximately $7.6 billion, marking the end of AT&T’s ties to the entertainment industry.
According to reports, the transaction will be completed in stages, with AT&T receiving $1.7 billion in 2024 and $5.4 billion in 2025, and the remainder by 2029.
AT&T initially acquired DirecTV (NASDAQ:DTV) for $48.5 billion in 2015 but faced significant customer losses, prompting the sale of a 30% stake to TPG in 2021.
Separately, DirecTV (NASDAQ:DTV) announced plans to acquire Dish TV and Sling TV from EchoStar in a debt exchange transaction valued at $1, alongside assuming about $9.8 billion in debt.
12:30pm: Market gains in sight
Stocks fluctuated on Monday morning but remained poised for strong monthly and quarterly gains as investors awaited comments from Federal Reserve Chair Jerome Powell ahead of the crucial September jobs report.
By noon, the S&P 500 was slightly positive, while the Nasdaq rose about 0.15% after recovering from earlier lows. In contrast, the Dow Jones Industrial Average dipped around 0.2%.
Despite typical September volatility, the indexes have seen gains supported by the Fed's recent interest rate cut and indications of economic resilience, contributing to three consecutive weeks of stock gains.
Investors are particularly focused on the upcoming jobs report, which is expected to provide insight into the labor market's slowdown and the Fed's economic strategy. Powell's remarks later in the day could help clarify the economic outlook.
11:15am: What's ahead for the week?
A look ahead at what's happening on the policy and data front this week.
Federal Reserve Chair Jerome Powell is scheduled to address the NABE conference on Monday afternoon, where analysts expect him to lay out his assessment of the economic and policy outlook.
"Having just spoken last week, whether he breaks new ground is less clear, but with more canvas upon which to paint, a clearer theme of risk management may emerge," UBS wrote on Monday morning.
Elsewhere, Friday's September employment report is likely to be significant for future policy decisions and may help ease concerns about a potential contraction in the labor market.
"We expect the report to be stronger overall than the current set of median projections. JOLTS and ADP data could garner attention for the same reasons," UBS noted.
"We expect the September manufacturing ISM to be little changed. We think lightweight vehicle sales will be stronger in September than August, but would caution against annual comparisons given big differences in selling days."
10am: Nasdaq rises, Dow falls
It's a mixed start for Wall Street at the open, with semiconductor stocks down but Apple doing a lot of heavy lifting.
The S&P 500 and Dow Jones are in the red, down 0.1% and 0.5%, but the Nasdaq is up 0.25%, along with the small and mid-caps of the Russell 2000 up 0.7%.
Among notable movers, the largest company, Apple Inc (NASDAQ:AAPL, ETR:APC), is up 1.9%, Nvidia is down 0.4%, other big tech names are not much moved, while JPMorgan is one of the bigger fallers, down 1.4%.
The biggest risers on the Nasdaq 100 are China's Pinduoduo Inc (NASDAQ:PDD) and Apple.
Along with Nvidia, semiconductor stocks are down, including Micron Technology, Arm Holdings, Broadcom and ASML.
8.05am: Stocks expected to slide
US stocks are set to retreat on Monday ahead of a torrent of new economic data for the market to chew over in the coming week.
Ahead of the last Wall Street session of September, S&P 500 futures were pointing to a 0.2% decline, while Nasdaq 100 futures were down 0.3% and Dow Jones futures 0.1% lower.
Last week saw small losses for the S&P and Nasdaq, with modest gains for the Russell 2000 and another record closing high eked out by the Dow Jones.
The end of last week brought the latest update on the core PCE index, the Federal Reserve’s preferred inflation measure, which roughly supported the Fed’s view that inflation is on a sustainable path back down to its 2% target.
This morning has seen a mixed Asian session, with a 4.8% fall for the Nikkei 225 in Tokyo, while the SSE Shanghai composite index jumped 8.5% to extend its gains over the past two weeks to almost 30%.
"The market narrative has shifted from fears about a recession and global economic slowdown, to major central bank stimulus and a 180-degree shift in risk sentiment," said market analyst Kathleen Brooks at XTB.
"Financial market dynamics have also changed," she added, noting that the CBOE three-month implied correlation index, which measures the correlations between the top 50 stocks on the S&P 500, has started to move higher in September to suggest the largest US stocks are moving in unison after the summer saw this correlation falling.
"Stronger correlations between the top 50 stocks suggests that the rally is broad-based," Brooks said, with the S&P 500 hitting a number of fresh record highs last week, although it faltered slightly on Friday.
This highlights risks, she added. "If the biggest stocks on the S&P 500 index are more correlated on the way up, that means that they could fall in unison on the way down, which could exacerbate any sell off. While risk sentiment is higher for now, there are concerns about high valuations, particularly for US stocks."
Third-quarter earnings are coming into view, with Nike Inc and Constellation Brands this week as October begins, with the big banks reporting at the end of next week to kick-start the deluge.