US stocks fell on Monday afternoon as the 10-year Treasury yield (^TNX) jumped above 4% for the first time since August a week before key inflation data and the start of earnings season.
The Dow Jones Industrial Average (^DJI) fell 1.2%, about 400 points, after hitting a new record high as stocks rose to close last week. The S&P 500 (^GSPC) fell more than 1%, while the Nasdaq Composite (^IXIC), which was dominated by technology stocks, also fell more than 1.1%.
Shares fell to session lows with roughly one hour of trading remaining after a judge ordered Alphabet (GOOG, GOOGL) to open its Google app store business, Google Play, to more competition. Alphabet shares fell more than 2% amid the ruling.
Oil futures jumped more than 3.5% on Monday, extending their biggest weekly gain in more than a year, as traders weighed whether Israel’s expected response to the latest Iranian attack would include targeting the country’s oil fields.
The upgrade of Hurricane Milton to Category 5 off the Gulf of Mexico also helped push up crude oil prices. Meanwhile, insurance stocks fell as the storm headed towards the Florida coast.
Read more: What a Fed rate cut means for bank accounts, CDs, loans and credit cards
Meanwhile, hopes for a significant Fed cut in interest rates faded after a better-than-expected September jobs report dispelled concerns about cracks in the labor market. Traders abandoned last week’s bets on a 0.50% rate cut in November and now see an 88% chance of a 0.25% cut, according to a European Central Bank report. CME FedWatch tool.
These convictions will be tested later this week, primarily with the release of key consumer inflation data on Thursday.
The October consumer inflation report scheduled for Thursday is now awaited to provide fresh insight into whether the Fed is making progress in reducing already chilly price pressures to its 2% target.
The start of third-quarter earnings is in focus as Goldman Sachs raised its target for the S&P 500, saying it expects higher profit margin growth for corporate companies. Following Tuesday’s Pepsi (PEP) results, the season begins in earnest on Friday with reports from major banks JPMorgan (JPM), Wells Fargo (WFC), and BlackRock (BLK).
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Nvidia is the only gainer of the session among “Mag 7” stocks.
Nvidia (NVDA) was on track to close Monday’s session as the sole gainer among Monday’s “Mag 7.”
Shares of AI chip heavyweights rose nearly 3%, while the rest of the big tech names were in the red.
Amazon (AMZN) and (TSLA) were the biggest losers among the “Mag 7” stocks, as they both fell by more than 3%.
Nvidia was the only gainer among Mag 7 shares on Monday
Alphabet falls 2% after Google Play Store order
Alphabet (GOOG, GOOGL) stock fell more than 2% on Monday After the judge ordered The tech giant is opening up its Google app store business, Google Play, to more competition.
The judge presented the changes that Google must make, including allowing Android applications from competing sources.
The injunction stems from a lawsuit filed in 2020 alleging that Google squashed competitive competition with its App Store controls on distribution and payment.
Apple shares downgraded by Jefferies, which says ‘serious AI’ smartphones are two years away
Laura Bratton from Yahoo Finance reports:
Apple (AAPL) was downgraded from buy to hold by Jefferies analyst Edison Lee, citing concerns about inflated expectations for new AI-enabled iPhones.
Smartphone hardware is not yet advanced enough to accommodate the kind of high-tech AI analysts iPhone consumers are hoping for, Lee said.
“Near-term expectations for the iPhone 16 and even 17 are very high,” Lee wrote in a note to investors Sunday night.
Read more here.
Consumers are becoming more optimistic about the housing market
Yahoo Finance’s Claire Boston reports
Consumers are more confident about the housing market than they were two years ago, and many expect mortgage rates to decline in the next 12 months.
The Fannie Mae home buying confidence index rose 1.8 points in September to 73.9, its highest reading in more than two years, according to a report from Fannie Mae. Data released on Monday. The index rose more than 9 points over the same period last year.
42% of survey respondents expect mortgage rates to fall in the next 12 months, compared to 39% the previous month. However, only 19% think it’s a good time to buy a home now, near all-time lows.
Read more here.
Dow Element Travelers is sinking along with other insurers as Hurricane Milton intensifies into a Category 5 category
Insurance stocks fell Monday as Milton strengthened into a Category 5 hurricane threatening the Gulf of Mexico and headed toward Florida.
Shares of insurers Allstate (ALL) and Dow (^DJI) Travelers (TRV) fell more than 3%.
Florida-based Universal Insurance (UVE) stock fell more than 18%.
Meanwhile, crude oil futures extended their gains, rising more than 3% as markets awaited Israel’s retaliation against oil-producing Iran following last week’s missile attack.
Chevron (CVX) He said It evacuated all employees from the Blind Faith platform in the US Gulf of Mexico and closed the facility in preparation for Hurricane Milton.
Google is about to find out how the Department of Justice wants to reshape its empire
Yahoo Finance’s Alexis Keenan reports:
Google (GOOG, GOOGL) is about to find out what the Department of Justice believes needs to be done to dismantle the tech giant’s dominance of the online search market.
Plaintiffs are expected to file a document early Tuesday in federal court outlining potential remedies after they successfully argued in a landmark trial that Google acted as an illegal monopoly.
Read more here.
DJT stock rose after Elon Musk appeared at a Trump rally
Shares of Trump Media and Technology Group (DJT) rose about 15% on Monday after Elon Musk made a surprise appearance at Donald Trump’s rally in Butler, Pennsylvania, over the weekend — the same location where the former president survived an assassination attempt in July.
The tech billionaire, who serves as CEO of Tesla (TSLA) and SpaceX and also owns social media platform X (formerly Twitter), has been vocal about his support for Trump ahead of next month’s election. Trump even said He will consider a ministerial position For Musk, however, the businessman likely won’t be able to serve “with all the things he’s got going on.”
At Saturday’s rally, Musk told the crowd that Trump is the only candidate who can “preserve democracy in America,” adding that this will be “the last election” if Trump does not win.
Former President It remains in a dead end race Against incumbent Vice President and Democratic nominee Kamala Harris, who has just begun a flurry of media appearances in an attempt to build recent momentum in the polls.
Harris appeared on an episode of “Call Her Daddy,” a popular podcast aimed at Generation Z, along with an interview on “60 Minutes.”
Read more here.
Super Micro Computer shares rise due to demand for artificial intelligence servers
Shares of Nvidia Customer (NVDA) and AI server maker Super Micro Computer (SMCI) jumped as much as 17% on Monday after the company reported shipping data.
Super Micro Computer said Monday morning that it has shipped more than 2,000 of its edge servers to large-scale artificial intelligence data centers since June. The company said it now sells servers using more than 100,000 AI chips each quarter — a sign that there is no near-term slowdown in demand for AI, as analysts and investors fear. The server maker said it is selling its hardware to “some of the largest AI factories ever built.”
A rise in Super Micro shares on Monday helps them recover from a slump in late September, when shares fell 15% after reports that the U.S. Department of Justice was investigating the company over potential accounting violations.
Super Micro stock has soared at the start of 2024 as major technology companies rush to create new generative AI technologies with ever-increasing power requirements. The stock has been declining since hitting highs near $120 per share in March.
Oil continues its gains, up 2% as the market awaits Israeli retaliation against Iran
Oil extended gains on Monday after its biggest weekly gain in more than a year in anticipation of Israeli retaliation against Iran over last week’s missile strike.
West Texas Intermediate crude futures (CL=F) rose more than 2% to trade above $76 a barrel after rising more than 9% last week. Brent crude futures (BZ=F), the international benchmark, also rose more than 2% to reach $80 a barrel for the first time since August.
Tel Aviv pledged to respond after Iran fired about 200 ballistic missiles towards Israel on Tuesday. Traders are calculating the chances that the response will target Iran’s oil infrastructure.
“The Iranian military responded by saying that any attack from Israel would trigger a stronger response from Iran, so the impact of geopolitical phases on crude oil continues to grow,” Dennis Kessler, senior vice president of trading at BOK Financial, wrote on Monday.
‘Mag 7’ shares mixed with Nvidia up 1% and Amazon down 2%
Nvidia (NVDA) and Amazon (AMZN), two of the “Magnificent Seven” tech stocks, were moving in opposite directions on Monday.
Shares of heavyweight Nvidia rose more than 1% to trade above $126 a share.
E-commerce and cloud services giant Amazon fell more than 2% after Wells Fargo downgraded the stock to equal weight from overweight amid expectations that advertising revenues will moderate.
Growth in Amazon’s cloud unit is unlikely to offset margin headwinds, according to Wells Fargo analyst Ken Jawrelski. “The power of AWS alone is not enough,” he wrote.
Nvidia shares rose more than 1%
Stocks open lower as 10-year Treasury yield rises to 4%
The major averages opened lower on Monday as the 10-year Treasury yield (^TNX) rose back above 4%.
The Dow Jones Industrial Average (^DJI) fell about 0.3% after hitting a new record high on Friday. The S&P 500 (^GSPC) was down nearly 0.3%, while the Nasdaq Composite (^IXIC) was down 0.5%.
The yield on the benchmark 10-year Treasury note (^TNX) reached 4% for the first time since August, as hopes for another 50 basis point rate cut from the Federal Reserve faded after a stronger-than-expected jobs report in September.
Oil prices extended gains on Monday after their largest weekly increase in more than a year as markets awaited an Israeli response to Iran over the barrage of missiles it launched last week.
West Texas Intermediate crude futures (CL=F) rose more than 1% to trade above $75 a barrel, after gaining more than 9% last week. Brent crude futures (BZ=F), the international benchmark, also rose more than 1% to trade above $79 a barrel.
Pfizer stock jumps after reports Starboard is taking a $1 billion stake
Pfizer (PFE) stock rose 2.6% premarket on Monday as investors reacted numerousMedia Activist investor Starboard Value has reportedly taken a $1 billion stake in the pharmaceutical giant.
Starboard has approached Pfizer executives Ian Read and Frank D’Amelio about helping turn the tide at the pharmaceutical company, various media outlets reported, citing unnamed sources. Pfizer, the maker of the world’s first approved Covid-19 vaccine, is struggling to maintain its dominance after the pandemic. The Wall Street Journal reported that Reid and D’Amelio expressed interest in helping Starboard. Starboard’s plans and the changes it will make at Pfizer are unclear.
The stock’s early Monday morning moves will put it positive for the year, but shares are well below their record highs of nearly $60 in 2022.
Pfizer is scheduled to report earnings on October 29. Wall Street analysts expect the company to report revenue of $14.8 billion, up about 12% from the previous year. Only half of the analysts covering the stock recommend buying it, according to Bloomberg data.