The stock market embarked on a turbulent start to the new trading quarter, with major indices closing on mixed notes following a last-minute agreement by US lawmakers to avert a government shutdown. Additionally, closely monitored auto delivery data played a significant role in Monday’s market performance.
The S&P 500 index (^GSPC) concluded just above the flatline, demonstrating resilience amid the market fluctuations. Meanwhile, the Dow Jones Industrial Average (^DJI) registered a modest decline of approximately 0.2%. In contrast, the tech-focused Nasdaq Composite (^IXIC) experienced a commendable upswing of around 0.7%, largely propelled by historically low valuations in the sector.
In a surprising turn of events, both the Senate and the House of Representatives sealed an eleventh-hour accord on Saturday, effectively staving off the previously imminent government shutdown. This development provided a momentary reprieve for investors who had been apprehensive about potential adverse effects on both the economy and the stock market. However, this respite is expected to be short-lived, as the budgetary impasse will recommence following a brief extension period.
Despite the temporary relief, the major market indices still contend with multiple headwinds that contributed to significant losses in the previous quarter and month. The Federal Reserve’s unwavering stance on maintaining high interest rates for an extended duration remains a prominent factor. The rise in oil prices and Treasury yields (^TNX) further exacerbated the pressure on equities.
Monday also saw the release of the Institute for Supply Management (ISM) Manufacturing Index for September, which recorded a reading of 49, signaling a potential contraction in the sector. Concurrently, the United Auto Workers (UAW) strike was extended to additional Ford and GM plants on Friday, causing disruptions in trading activities. However, a glimmer of hope emerged on Sunday with a positive resolution reached between the UAW and Mack Trucks.
In the forthcoming week, auto companies are slated to disclose their deliveries for the past quarter, offering critical insights into the strike’s impact on the industry. Additionally, the World Bank’s downward revision of China’s growth outlook for 2024 has raised concerns about demand in the world’s second-largest economy.
In conclusion, the performance of the stock market remained mixed, reflecting the ongoing interplay of various economic and geopolitical factors influencing investor sentiment. Investor attention is now focused on the eagerly awaited US jobs report scheduled for release on Friday. This week is poised to be instrumental in painting a clearer picture of the market’s current state and the trajectory of future trading.
Source: Yahoo Finance
