US equity indexes experienced an upward movement following a significant drop in consumer confidence, which fell the most in three years, and a deterioration in a regional manufacturing gauge. This raises questions regarding Federal Reserve Governor Michelle Bowman's position that supports a cautious approach to monetary policy. On Tuesday afternoon, the S&P 500 index climbed 0.2% reaching 5,732.5, while the Nasdaq Composite saw a rise of 0.6% to 18,073.6.
The Dow Jones Industrial Average experienced an increase of 0.1% to 42,170.5, after achieving a new record high in the previous trading session. The materials sector emerged as the leading beneficiary, whereas the financial sector exhibited the most significant declines throughout the day. In economic developments, the Conference Board's indicator of consumer confidence dropped to 98.7 in September, down from 105.6 in August, significantly below the anticipated 104 as per a survey conducted by Bloomberg. Delineating the situation, Dana Peterson, Chief Economist at The Conference Board, commented, "September's decline was the largest since August 2021 and all five components of the Index deteriorated.
Consumers' assessments of current business conditions turned negative while views of the current labor market situation softened further." Moreover, the Richmond Fed's monthly manufacturing index declined to minus 21 in September from minus 19 in August, conflicting with the expectations of an improvement to minus 12 according to a Bloomberg survey.
This index indicates contraction, aligning with the S&P global flash estimate but differing from reports from the Empire State and Philadelphia Fed indexes, which signal expansion. Governor Bowman, during remarks on Tuesday, advocated for a gradual easing of monetary policy restrictions, a stance counter to the prevailing consensus within the Federal Open Market Committee.
Despite recent advancements, she indicated that inflation continues to pose a concern, while the labor market's weakness may not be as severe as the data suggests. Notably, Bowman was the sole dissenter in the FOMC's recent decision to lower the target range for the federal funds rate by 50 basis points during their last meeting. In the bond market, most US Treasury yields experienced declines, reversing earlier session trends.
The 10-year yield increased marginally by 1.5 basis points, settling at 3.75%, while the two-year rate dipped 1.3 basis points to 3.56%. In corporate news, Marriott International ($MAR) has teamed up with Sands China, a subsidiary of Las Vegas Sands ($LVS), to debut The Luxury Collection brand in Macao.
This partnership saw shares of Las Vegas Sands soar by 6.1% intraday, marking it as the second-largest gainer on the S&P 500. Visa ($V) is bracing for a lawsuit from the US Justice Department, expected as early as Tuesday, that alleges it has illegally monopolized the debit card market within the United States, as per Bloomberg's report citing knowledgeable sources.
Following the announcement, shares of Visa plummeted by 4.3% intraday, making it the poorest performer on the Dow. Regeneron ($REGN) is touted to have an 'underappreciated' pipeline of potential drug candidates, helping mitigate the backlash from a Monday legal judgment that rejected its attempts to prevent Amgen's ($AMGN) Eylea biosimilar retina medication from entering the market, according to Truist Securities.
Regeneron is currently assessing its options, with Truist noting that Amgen has not yet determined when it will roll out its Pavblu product. As a result, shares of Regeneron faced a downturn, dropping 5.8% intraday and ranking as the steepest decliner on the Nasdaq. In commodities, West Texas Intermediate crude oil futures climbed 1.3% to $71.32 per barrel, while gold prices increased by 0.9% to $2,675.50 an ounce, and silver prices surged by 4% to $32.35..