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Stock Market Today: S&P500 begins Q2 in red as spiking Treasury yields blunt bulls

Published 04/01/2024, 06:33 AM
Updated 04/01/2024, 04:10 PM
© Reuters

Investing.com -- The S&P 500 started the second-quarter on the back foot Monday as surging Treasury yields kept bullish bets at bay after a surprise expansion in manufactory activity underscored the strength in the economy and cooled investor expectations for sooner rather than later Federal Reserve rate cuts.  

At 16:00 ET (21:00 GMT), the S&P 500 fell 0.3%, the NASDAQ Composite gained 0.1%, and the Dow Jones Industrial Average was down 240 points, or 0.6%.

Treasury yields rise as manufacturing activity unexpectedly expands

The yield on the 2-year Treasury, which is sensitive to Fed policy, jumped 9 basis points to 4.712% after the ISM manufacturing purchasing managers' Index unexpectedly rose to a reading of 50.3 from 47.8. The index reading pushed above 50, which indicates an expansion in manufacturing, for the first time since Sept. 2022. 

The prices paid component of the index, a gauge of inflation, jumped to 55.8 from 52.5, signalling "raw material prices rose at their fastest pace since July 2022," Oxford Economics. 

The data supported Fed chairman Powell message on Friday that the Fed doesn't need to rush to cut rates amid signs of a strong economy. 

"We don’t need to be in a hurry to cut," Powell said Friday at a San Francisco Fed event. “The fact that the U.S. economy is growing at such a solid pace, the fact that the labor market is still very, very strong, gives us the chance to just be a little more confident about inflation coming down before we take the important step of cutting rates.”

The odds of a June cut were not seen at 56% from 64% last week, according to Investing.com's Fed Rate Monitor Tool.

Microsoft continues to ride AI wave, Alphabet shines on Jefferies backing; Micron in rally mode

Microsoft (NASDAQ:MSFT) rose nearly 1% as the tech giant plans to begin offering its chat and video app, Teams, as a standalone product, separating it from its Office suite on a global scale, Reuters reported on Monday. 

It comes six months after the tech giant initiated a similar separation in Europe, responding to regulatory scrutiny over its product bundling practices.

Alphabet Inc Class A (NASDAQ:GOOGL), meanwhile, closed 3% higher after Jefferies touted optimism on the stock amid expectations that the company is likely to address several investor concerns including the "AI threat," to its advertising business and cloud revenue that has lagged rival Amazon (NASDAQ:AMZN)'s AWS.

Alphabet's Google also agreed to amend to its disclosures related to private, or "incognito," browsing data to settle a part of a lawsuit that alleged the company collected users' data without consent.

In chip stocks, meanwhile, Micron Technology Inc (NASDAQ:MU) rallied more than 5% after  Bank of America hiked its price on the chipmaker to on expectations for a surge in demand for memory chips to feed the AI revolution.  

AT&T (NYSE:T) in data leak woes; Tesla price Model Y price hike kicks off; Trump Media slumps on annual loss 

Tesla (NASDAQ:TSLA) $1,000 price hike for all its Model Y variants in the United States took effect on Monday. The price hikes come amid waning demand and strong competition in China. 

The announcement comes as the electric-vehicle maker is expected to report weak quarterly sales as early as Tuesday amid rising competition from cheaper rivals like China’s BYD (SZ:002594).

Trump Media & Technology Group Corp (NASDAQ:DJT) fell 21% after reporting a net loss of $58.2 million compared with a profit of $50.52M a year earlier. 

AT&T Inc (NYSE:T) fell 0.6% after confirmed that data on about 73 million current and former customers may have been leaked on the dark web.

Latest comments

There will be no rate cuts this year. Inflation will likely climb. Better chance of a rate hike than cut.
Fed jumped the gun talking about rate cuts. Commodity prices (SPGSCI) started taking off the day of the December FOMC announcement, and the bond market started hiking rates later that month. Asset price inflation has led consumer price inflation so far this cycle. A cut could still be the next move but only if stocks sell off first.
I m a j o k e
Look around this country. We're screwed! Have any of you noticed the apartment complexes going up from coast to coast. Many Americans have been priced out of being homeowners. Median income has to be at least $100,000 a year to be an owner. In my town housing prices have increased 500% over the last 20 years. In 2000, you could buy a brand new 4 bed, 2 bath brick home with a 2 car garage for $125,000. The price is $500,000 now. That's another bubble readying for a burst.
Homeowners can be owners of apartments, like condos and co-ops.
Another late trade miracle in the biggest investment JOKE in history.
Where??? I was waiting for it but no - falling even more!!! No miracles this time, your desired correction has just started!
Tech turned green for no reason and therefore so did Dax despite it being closed
Sell this BS, and invest in the EU! Economy is in deep sh..., inflation is almost at 2% already, rate cuts are coming in the next meeting latest and many more than 3 cuts in 2024! 8-)
for the first time since Sept. 2022. - 2023 you meant?
Should be Nov 2022.
True O_O
Rate cuts would send inflation to the moon. Would start a second great depression.
We already in one cos American keeps redefining what a recession or depression is so it'll be a third
Post the old and new definition of “what a recession or depression is so” we can compare.
Excuse da jour, as usual.
SP500 2700-2900 before 6000.
I love how when we had week after week of inflation data coming in higher than expected the market went up and they said that market thinks there will be rate cuts, but now when inflation data is reported as coming in line with expectations the market dumps and they say rate cut hopes fade. This is all just gaslighting nonsense. Anybody who saw the headlines this morning versus this afternoon see that it is all just nonsense.
Someone said (Citi?) it's time to dump... Otherwise, complete nonsense. Last week, the same data caused euphoria in markets.
U.S economy is not giving any signal for any rate cut before 4th quarter.
and govt spending levels suggest not even then.
Not to mention bombing Iran's embassy in Damascus
It's in another article about Oil prices settle higher as supply concerns rise on fresh geopolitical tensions
market has overshot expectations again....at best we get a rate cut in Q4. June = no chance
Oh the rate cut hopes are fading? Few hours ago hopes were high! These "writers" are absolute tr@sh
fix your encoding ffs. """""""
New economic data were reported this morning, a few hrs ago.
Headline this morning "Stocks soar as inflation data sparks rate cut hopes", Headline this afternoon "Stocks tank as inflation data sparks rate cut fears". This website is great for people who want their iq to drop.
ROFL - so true
7 rate cuts baked in. Pre recession setups all over. This is just wall st getting max complacency before rug pulling. Inflation is about to shoot up through the roof, economy is just way too strong. They need a crisis or its bye bye economy.
Strong economy is mostly due to federal spending of massive debt. The music will stop eventually.
why? govt can print for ever. only hyperinflation will stop things..
@Stephen: Federal spending was up in every year of Trump's term, but it's down in every year of Biden's term. @Kelly: 3 cuts baked in for 2024.
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