The Dow Jones Industrial Average and the S&P 500 achieved record closing levels on Monday, as investors processed commentary from three Federal Reserve officials regarding the central bank's recent monetary policy choices. The Dow advanced 0.2% to reach 42,124.7, while the S&P 500 rose 0.3% to hit 5,718.6.
Simultaneously, the Nasdaq Composite saw a modest increase of 0.1%, settling at 17,974.3. Sectors such as energy and consumer discretionary were the frontrunners for gains, whereas healthcare experienced the most significant decline. On Wednesday, the Federal Open Market Committee (FOMC) opted to reduce its benchmark lending rate by 50 basis points, adjusting it to a new range between 4.75% and 5%. Atlanta Fed President Raphael Bostic and Minneapolis Fed President Neel Kashkari commented that the FOMC made an appropriate decision, though they noted that upcoming economic data would likely guide future policy maneuvers. In a separate statement, Chicago Fed President Austan Goolsbee expressed his comfort with the recent 50-basis-point interest rate cut.
He remarked, "To me, the specific timing of the initial cut is less important than the longer-arc view that conditions are good on both sides of the mandate. Rates need to come down significantly going forward if we want the conditions to stay that way." Furthermore, Fed Governor Michelle Bowman remarked on Friday that the FOMC's actions could potentially be seen as "a premature declaration of victory" over inflation, marking the sole opposing vote during last week’s meeting. In the bond market, the yield on the US 10-year treasury climbed 2.3 basis points to 3.75%, while the two-year rate edged up by 1.3 basis points to 3.59%. Turning to economic indicators, growth in the US private-sector output slumped to a two-month low during September, attributed to ongoing weaknesses in manufacturing.
Additionally, S&P Global’s flash purchasing managers' index showed a sharp deterioration in the one-year headline outlook. Regarding commodities, West Texas Intermediate crude oil fell 0.7% to $70.53 per barrel. In corporate news, shares of Tesla saw a significant hike of 4.9%, making it the top performer on both the Nasdaq and the S&P 500.
Expectations for the electric vehicle manufacturer's third-quarter deliveries have been revised upward, driven by enhanced incentives in China that have boosted sales, as noted by Tudor Pickering Holt in a client communication. Intel also shone brightly, registering a 3.3% rise to become the top performer on the Dow and the second-best on the Nasdaq.
Apollo Global Management proposed a substantial investment of up to $5 billion in Intel, according to reports from Bloomberg News, citing anonymous sources. Following this news, Apollo's shares experienced a 0.6% increase. Earlier, Qualcomm had expressed interest in a potential acquisition of Intel. In contrast, shares of Moody's experienced a decline of 3.2%, marking the second-largest drop on the S&P 500 after Raymond James downgraded the stock from market perform to underperform. Additionally, companies such as Costco Wholesale, Accenture, Micron Technology, Cintas, and AutoZone are poised to announce their latest quarterly financial results later this week. In precious metals, gold prices increased by 0.2%, reaching $2,652.60 per troy ounce, while silver saw a decline of 1.6%, settling at $31 per ounce. $US30 $US500 $TSLA $INTC $APO $QCOM $MCO $COST $ACN $MU $CTAS $AZO.