September 30, 2023

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Stocks mixed as volatile month rolls on; Nasdaq pares earlier losses

Stocks turned positive Wednesday, with all three major stock indexes pushing higher during the afternoon session following a report that Congress might reach a short-term agreement to raise the government borrowing limit and prevent a default.

The Nasdaq pared earlier losses to trade in slightly positive territory Wednesday afternoon, with investors swooping in to buy a dip in tech and growth stocks. The index had been down by as much as 1.2% earlier in Wednesday’s trading day. Both the S&P 500 and Dow also gained, cutting losses after Bloomberg reported that Senate Minority Leader Mitch McConnell was set to offer Democratic lawmakers a deal to temporarily raise the government debt ceiling through November. 

Earlier, the three major indexes had been lower as concerns over inflation and spiking energy and commodity prices outweighed optimism over the pace of the economic recovery.

So far in October, equities have see-sawed between steep gains and losses, with investors struggling to ascertain whether the economic and policy backdrop will be supportive enough for risk assets to prevent a repeat of September’s volatility. The CBOE Volatility Index, or VIX, has jumped to hold above 20, after spending much of the summer in the mid-teens. 

“It’s unclear what October holds. I have a big question market in my mind: Could it be the ugly sequel to September?” Kristina Hooper, Invesco U.S. chief global market strategist, told Yahoo Finance Live on Tuesday. 

“Certainly what we’ve seen thus far is that any time there is a selloff, investors are quick to move in and find opportunities,” she added. “I would assume that we’re likely to see more volatility going forward as we anticipate the Fed’s tapering announcement. And so that creates an announcement where investors can dollar-cost average on down days in areas where they would like to, and where they’re interested in adding exposure. This is probably not the only selloff we’ll see for October.”

One of the primary concerns for markets has been around inflation, with prices of goods and services rising for both businesses and end users as demand remains elevated and supply chain constraints continue to weigh. Traders have been waiting to see whether these persistent issues ultimately drag on economic activity and corporate profits, with details on the latter set to come into focus with the unofficial start of third-quarter earnings season next week with the big banks. 

At least for now, the latest batch of economic data has been largely upbeat on the state of the U.S. economy. Durable goods orders, retail sales and purchasing managers’ indices tracking activity across both the U.S. manufacturing and services sector have all recently topped expectations. However, this data has also brought copious signs of inflation: A subindex tracking prices paid by suppliers rose in the Institute for Supply Management’s latest services index, and personal consumption expenditures rose at the highest annual rate since 1991 based on government data released last week.

“It’s not a surprise that the world ‘stagflation’ is coming back into everybody’s vernacular. Energy prices are going up, these cargo ships are stacked up on both sides of the coast, shortages of everything … and those prices are going up. But the core news is good,” Simeon Hyman, ProShares Advisors head of investment strategy, told Yahoo Finance Live on Tuesday.

“Is there going to be a little bit of inflation? Probably. Are rates going to go up? Just with tapering, almost absolutely,” Hyman added. “But will there be a contraction of economic activity? Very unlikely — the economy is likely to remain pretty strong.” 

4:06 p.m. ET: Stocks swing into positive territory after debt ceiling extension reports; S&P 500 ends 0.4% higher

Here were the main moves in markets as of 4:06 p.m. ET:

  • S&P 500 (^GSPC): +17.83 (+0.41%) to 4,363.55

  • Dow (^DJI): +102.32 (+0.30%) to 34,416.99

  • Nasdaq (^IXIC): +68.08 (+0.47%) to 14,501.91

  • Crude (CL=F): -$1.87 (-2.37%) to $77.06 a barrel

  • Gold (GC=F): +$4.10 (+0.23%) to $1,765.00 per ounce

  • 10-year Treasury (^TNX): -0.5 bps to yield 1.5240%

2:00 p.m. ET: McConnell reportedly set to offer agreement to temporarily raise debt limit

Senate Minority Leader Mitch McConnell is reportedly poised to offer Democratic lawmakers a deal to temporarily raise the government debt ceiling through November, Bloomberg reported Wednesday afternoon, citing unnamed sources familiar with the matter. 

The move would help avert a government default in the near-term, or an outcome policymakers including Treasury Secretary Janet Yellen have warned would be catastrophic to the U.S. economy. 

1:45 p.m. ET: Nasdaq turns slightly positive

The Nasdaq pared earlier losses to trade in positive territory Wednesday afternoon. The S&P 500 and Dow held lower but game off session lows.

The energy, materials and healthcare sectors lagged in the S&P 500, while consumer discretionary, utilities and consumer staples outperformed. The Dow dropped nearly 100 points, or 0.2%, led by a drop in materials company Dow Inc.  

10:39 a.m. ET: Bitcoin reaches highest level since May

Bitcoin prices (BTC) briefly touched their highest level in nearly five months during Wednesday’s session, with traders flocking to digital currencies despite the drawdown across other risk assets like stocks.

Prices for the largest cryptocurrency by market cap reached as much as $55,173 Wednesday morning in New York, based on Yahoo Finance data. This was the first time since May that the token crossed the $55,000 threshold, and represented a spike of more than 10%.

Other cryptocurrencies also traded broadly higher. Ethereum (ETH) gained more than 5% at session highs to top $3,600, while Litecoin (LTC) and XRP (XRP) also rose. 

9:30 a.m. ET: Stocks open sharply lower 

Here’s where markets were trading after the opening bell Wednesday morning: 

  • S&P 500 (^GSPC): -37.96 (-0.87%) to 4,307.76

  • Dow (^DJI): -255.89 (-0.75%) to 34,058.78

  • Nasdaq (^IXIC): -137.49 (-0.95%) to 14,298.00

  • Crude (CL=F): -$0.69 (-0.87%) to $78.24 a barrel

  • Gold (GC=F): -$3.90 (-0.22%) to $1,757.00 per ounce

  • 10-year Treasury (^TNX): -1.4 bps to yield 1.517%

8:50 a.m. ET Private payrolls rose more than expected in September as Delta variant constraints recede 

U.S. private employers added back more jobs than expected in September as COVID-19 cases moderated from a summer peak and alleviated some stress on the labor market.

Private payrolls grew by 568,000 last month, according to ADP’s closely watched monthly report on Wednesday. Economists were looking for private payrolls to grow by 430,000, according to Bloomberg consensus data. During the prior month, private-sector jobs had risen by 340,000. This figure was downwardly revised from the 374,000 previously reported for August.

ADP’s report comes, as usual, two days ahead of the “official” government jobs report from the Labor Department. Consensus economists are looking for non-farm payrolls to have risen by 488,000 in that report.

7:45 a.m. ET Wednesday: Stock futures reverse course, Nasdaq heads for a drop of 1.4% 

Here’s where markets were trading ahead of the opening bell Wednesday morning:

  • S&P 500 futures (ES=F): -49.85 points (-1.15%), to 4,284.25

  • Dow futures (YM=F): -329.00 points (-0.96%), to 34,854.00

  • Nasdaq futures (NQ=F): -195.75 points (-1.34%) to 14,459.50

  • Crude (CL=F): -$0.38 (-0.48%) to $78.55 a barrel

  • Gold (GC=F): -$5.90 (-0.34%) to $1,755.00 per ounce

  • 10-year Treasury (^TNX): +1.4 bps to yield 1.545%

6:10 p.m. ET Tuesday: Stock futures hold onto gains

Here’s where markets were trading Tuesday evening:

  • S&P 500 futures (ES=F): +3.75 points (+0.09%), to 4,337.75

  • Dow futures (YM=F): +50 points (+0.15%), to 34,233.00

  • Nasdaq futures (NQ=F): +13.75 points (+0.09%) to 14,669.00

NEW YORK, NEW YORK – SEPTEMBER 30: Traders work on the floor of the New York Stock Exchange (NYSE) on September 30, 2021 in New York City. In afternoon trading the Dow was down over 250 points as investors continue to worry about inflation, wages and supply chain issues. (Photo by Spencer Platt/Getty Images)

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter