US equity indexes displayed mixed performance as the market approached midday on Monday, reacting to the latest economic indicators from S&P Global which showed a slowing in both manufacturing and services sectors. These developments come at a time when top Federal Reserve officials are strategizing adjustments to monetary policy in the upcoming months. The S&P 500 index saw a minor increase, up 0.1% to reach 5,710.2.
In contrast, the Nasdaq Composite experienced a slight dip, falling by less than 0.1% to 17,950.2, while the Dow Jones Industrial Average remained relatively unchanged at 42,070.3. Notably, all sectors, apart from healthcare, technology, and communication services, exhibited gains during the intraday trading, with consumer discretionary stocks leading the upward trend. Turning to economic updates, the manufacturing conditions flash reading from S&P Global for September fell unexpectedly to a 15-month low of 47.0, down from 47.9 in August, and significantly lower than the anticipated 48.6 as per a survey complete by Bloomberg.
This decline suggests a contraction within the sector, contrasting sharply with the positive signals from the Empire State and Philadelphia Federal Reserve's manufacturing gauges which were released earlier. In the services sector, the conditions index experienced a slight decline, dropping to a two-month low of 55.4 in September from 55.7 in August, though it marginally surpassed the expected figure of 55.2.
The composite index also showed a decrease, falling to 54.4 in September compared to 54.6 in August, yet this still indicates an expansion consistent with the New York Fed's services index results released on September 17. On a different note, Atlanta Fed President Raphael Bostic addressed a conference on Monday, suggesting that the current economic conditions justify a cautious approach towards cutting interest rates to a level closer to what is deemed 'neutral.' His statements included a reminder that the previous week's significant cut of 50 basis points doesn't necessarily indicate a recurring trend, underscoring persistent high shelter inflation and a robust labor market as key considerations for a measured and data-driven approach moving forward. Conversely, Chicago Fed President Austan Goolsbee emphasized the necessity for a 'significant' reduction in interest rates to safeguard the labor market and bolster the economy.
He highlighted the increasing confidence in a return to the 2% inflation target, stating, 'As we've gained confidence that we are on the path back to 2%, it's appropriate to increase our focus on the other side of the Fed's mandate -- to think about risks to employment.' This suggests that a series of rate cuts may be anticipated within the next year. In the Treasury market, most yields experienced a downturn; however, the 10-year yield saw a marginal rise, increasing by less than one basis point to 3.73%. In corporate updates, General Motors ($GM) announced plans to lay off 1,695 employees at its Fairfax assembly facility located in Kansas, as reported by Reuters over the weekend.
Following this announcement, the automaker's stock plummeted by nearly 3% during intraday trading, marking it as the worst performer on the S&P 500. On a brighter note, Apollo Global Management ($APO) has proposed a substantial investment of up to $5 billion in Intel ($INTC), which resulted in a more than 3% increase in Intel shares, making it the top performer both on the Dow and S&P 500. Additionally, West Texas Intermediate crude oil futures saw a decline of 1%, settling at $70.19 per barrel.
The price of gold rose by 0.3% to $2,653.31 per ounce, while silver experienced a downtrend, falling 1.4% to $31.07. Overall, the interplay of economic indicators and corporate news illustrates a complex landscape for U.S. equities as investors navigate the implications of Federal Reserve policy changes, market performance, and company activities.
The ongoing challenges faced by companies like General Motors and the strategic moves by firms like Apollo Global Management reinforce the dynamic nature of the current financial environment..