By US stocks dipped to start the week as investors assessed the outlook for interest rates following the strong September jobs report.
The market is taking a breather after ending last week with the fourth consecutive weekly gain and a fresh record for the Dow Jones Industrial Average. Investors cheered the stronger-than-expected nonfarm payroll report, which showed employers added 254,000 jobs last month, crushing estimates of about 150,000.
The 10-year US Treasury yield jumped above 4% on Monday for the first time since late July, and investors are now questioning just how many times the Federal Reserve might cut interest rates this year as the economy remains on solid footing.
“After Friday’s strong employment report, the consensus might pivot to ‘no rush to ease further’ during the fall. We can’t rule out ‘higher for longer’ making a comeback this winter. We are in the none-and-done camp for the rest of this year,” Yardeni Research said in a note on Monday.
The futures market is pricing in two more 25 basis point rate cuts from the Fed by the end of the year.
Investors will turn their attention to earnings season, which kicks off this week with results from PepsiCo on Tuesday, followed by the first of the major banks on Friday.
Investors will look for clues about the financial strength of consumers, companies’ ability to monetize AI, and the overall impact of lower interest rates.
The September CPI report is also on the economic calendar this week, set to be released on Thursday. Economists expect the CPI index to rise 2.3% year-over-year in September, down from 2.5% in August.
Here’s where US indexes stood shortly after the 9:30 a.m. opening bell on Monday:
- S&P 500: 5,729.49, down 0.38%
- Dow Jones Industrial Average: 42,157.72, down 0.46% (-195.03 points)
- Nasdaq composite: 18,073.60, down 0.35%
Here’s what else is going on:
- JPMorgan’s chief strategist told Business Insider why he is feeling “increasingly queasy” about the market.
- Falling home prices and fed-up residents show the Texas housing boom is slowing down.
- Consumer prices are still in focus for investors despite the Fed’s recent pivot to the labor market.
In commodities, bonds, and crypto:
- West Texas Intermediate crude oil was up 1.53% to $75.52 a barrel. Brent crude, the international benchmark, was higher by 1.35% to $79.10 a barrel.
- Gold was down 0.07% to $2,665.90 an ounce.
- The 10-year Treasury yield was higher by 6 basis points at 4.027%.
- Bitcoin was higher by 0.45% to $63,102.
