Treasury yields climb
US markets finished in mixed territory following a key inflation update that revealed price growth slowed more than anticipated in September, with the technology sector standing out as a highlight. Meanwhile, Treasury yields maintained their upward trajectory, with the 10-year yield (^TNX) climbing to 5.29%.
The tech-focused Nasdaq Composite (^IXIC) was the only major index to see gains, climbing 0.2%, while the S&P 500 (^GSPC) dipped 0.3%. The Dow Jones Industrial Average (^DJI) dropped 0.9%, shedding more than 400 points, following a fractional decline in the previous session.
The Dow and the S&P 500 concluded September with monthly declines of 4.9% and 0.7%, respectively. Conversely, the Nasdaq managed a 1.7% gain for the month.
(^DJI)
50,906.05-443.87(-0.86%)
At close: September 30 at 4:48:36 PM EDT
^DJI^GSPC^IXIC
Technology shares moved higher after a moderate reading on the Personal Consumption Expenditures (PCE) index bolstered the belief that the Federal Reserve has room to pause rate hikes. On Wednesday, the central bank’s preferred inflation metric showed a 3.4% increase for August, falling short of the 3.7% growth analysts had expected.
This data prompted traders to significantly lower their expectations for a Federal Reserve interest rate hike at the October meeting, with probabilities dropping to 37% from over 70% just one week prior. Equities remain pressured by the weight of climbing bond yields and volatile oil prices as the conflict in Iran reaches its seventh month, keeping inflation risks at the forefront. Crude oil futures (CL=F, BZ=F) held steady on Wednesday, trading in the mid-$90-per-barrel range.
An ADP report regarding private-sector employment indicated that hiring remained robust throughout September. US private employers added 90,000 positions during the month, marking an increase from the 36,000 jobs created in August.
Micron (MU) earnings scheduled for after the closing bell will provide investors with further insight into the current landscape of the memory and AI sectors.
