U.S. stocks started October on a downward trend as investors reacted to volatile bond markets and a weaker-than-expected manufacturing report, overshadowing positive earnings from Micron Technology (MU). The Dow Jones Industrial Average fell 0.5%, while the S&P 500 and Nasdaq Composite dipped 0.1% and 0.2%, respectively, reversing earlier gains.
Read More
The 10-year Treasury yield surged by 3 basis points to 5.3%, marking a multidecade high as the bond market experiences notable instability. Recent readings on manufacturing activity indicated increasing price pressures in the U.S. The S&P 500's Manufacturing Purchasing Managers Index (PMI) registered at 55.9 for September, which was below the preliminarily estimated 57 but an increase from August's reading of 53.9. Additionally, the ISM manufacturing prices index soared to 77.9%, significantly above the expected 72.
Despite Micron's earnings exceeding Wall Street expectations and an optimistic Q1 outlook, its stock remained relatively unchanged. The company reported fourth-quarter earnings per share of $33.42 on revenue of $54.23 billion, surpassing estimates. Analysts noted that Micron's results reflected strong demand for memory, although concerns about supply constraints lingered.
As September came to a close, the Dow recorded losses for both the third quarter and September itself, while the Nasdaq experienced a rise. Persistent uncertainty tied to high Treasury yields and oil prices continues to pressure the broader market. In the tech sector, Nvidia (NVDA) shares increased by 0.7%, while AMD (AMD) shares fell by 1%.
In the labor market, initial jobless claims dropped for the fourth consecutive week, down by 1,000 to 197,000 claims, which was below economists’ expectations of 200,000. Meanwhile, plans for layoffs fell in September to the lowest levels for that month since 2022, although hiring remains cautious. U.S. employers announced 43,281 job cuts, a 20% decrease compared to September 2022, with technology firms accounting for a significant share of these announcements.
Today's data releases also included signs of maintaining momentum in the manufacturing sector, despite inflationary pressures influencing the Federal Reserve's potential interest rate decisions. Market watchers are keenly anticipating Friday's monthly job report for further insights into the economy.
In cryptocurrency news, Citigroup analysts raised Bitcoin’s price forecast from $82,000 to $113,000, citing increased market activity and inflows. Bitcoin performed robustly in the third quarter, up approximately 43% despite the broader economic environment.