On Thursday, stock market investors became more cautious and risk-averse as they watched stocks retrace their gains from Wednesday. The eagerly anticipated non-farm payrolls data, which will be released by the Bureau of Labor Statistics on Friday, is closely being monitored by traders.
During midday trading in New York, no S&P 500 sector showed any gains, reflecting the prevailing weak sentiment in the market. There was relatively low volatility in Treasury yields, and the US dollar experienced a slight decline.
Two Federal Reserve speakers shared their thoughts on Thursday. San Francisco Fed President Mary Daly stated that the market’s expectations for interest rate hikes in November and December seem reasonable and emphasized the importance of not prematurely declaring victory against inflation. Richmond Fed President Thomas Barkin commented that although current interest rates may seem high at the moment, he believes they are not excessively high in the long-term perspective.
In Thursday’s trading, the S&P 500 fell by 0.6% and the Nasdaq 100 slipped by 0.8%. Both blue-chip stocks and small caps in the Russell 2000 were down by 0.5%.
According to Morgan Stanley analyst Lisa Shalett, the US economy is facing an unusual situation where both the dollar and crude oil prices are surging simultaneously, which could have widespread impacts across economies, industries, and consumers. Shalett noted that this could particularly affect US exporters and multinational companies, increasing their costs and making their products less competitive globally. Higher oil prices would also reduce discretionary spending by consumers. Consequently, these factors could challenge corporate profits, despite analysts currently projecting 12% annualized growth through 2025.
In major US equity ETFs, the SPDR S&P 500 ETF Trust, the SPDR Dow Jones Industrial Average ETF, and the Invesco QQQ Trust all experienced declines.
Among the S&P 500’s sector ETFs, the Materials Select Sector SPDR Fund was the worst performer, falling by 1.8%. The Consumer Staples Select Sector SPDR Fund also dropped by 1.7%.
Stocks in focus included Lamb Weston Holdings Inc., which rose over 9% following a strong earnings report, and The Clorox Company, which fell over 7% due to a cyberattack. Electric vehicle startup Rivian Automotive saw a 19% slump after announcing a $1.5 billion green bond offering, while luxury EV maker Lucid Group Inc. fell by 8%. Conagra Brands Inc. and Constellation Brands Inc. fell by 1.5% and 3.5% respectively in reaction to their earnings. Levi Strauss & Co. is set to report its earnings after market close.
In commodities and bonds, crude oil fell by 2.4%, with WTI-grade crude trading at $81 per barrel. Treasury yields were mixed, with the 10-year yield down 2 basis points to 4.71% and the 30-year yield up 2 basis points to 4.88%. The US dollar index and the iShares 20+ Year Treasury Bond ETF both experienced declines, while the EUR/USD pair was slightly higher. European equity indices closed the session with a mixed performance.
Gold edged down by 0.2% to $1,817 per ounce, while silver fell by 0.6% to $20.86. Bitcoin declined by 1.4% to $27,410.