U.S. stocks fell on Monday as investors overhauled their views on interest rate cuts following the explosive release of jobs data ahead of key inflation data and the start of earnings season.
The Dow Jones Industrial Average (^DJI) fell 0.5% after ending the week on a sharp rise, hitting a new all-time high. The S&P 500 (^GSPC) fell about 0.5%, with the tech-heavy Nasdaq Composite Index (^IXIC) leading the decline, down 0.4%.
Oil prices soared more than 3% on Monday, the highest weekly increase in more than a year, as traders priced in whether Israel’s expected response to recent attacks by Iran would target the country’s oil fields. Extended the maximum increase. The Brent price (BZ=F) hit $80 per barrel during trading for the first time since August.
Hopes for a major interest rate cut by the US Federal Reserve disappeared after September’s better-than-expected jobs report allayed concerns about cracks in the labor market. The benchmark 10-year Treasury yield (^TNX) hit 4% for the first time since August amid doubts about the Fed’s next move.
Read more: What Fed Rate Cuts Mean for Bank Accounts, CDs, Loans, and Credit Cards
Traders abandoned bets on a 0.50% rate cut in November last week and now see an 88% chance of a 0.25% rate cut, according to the CME FedWatch tool. Such expectations could depress stock prices, which have soared to record highs amid expectations of a sharp interest rate cut and a “soft landing” for the economy.
The October consumer inflation report on Thursday is awaited for new insight into whether the Fed is making progress in reducing already chilling price pressures to its 2% target.
The start of the third quarter earnings report is being watched closely, as Goldman Sachs (GS) raised its S&P 500 target, expecting higher corporate profit margin growth. After Pepsi’s (PEP) earnings were announced on Tuesday, the season begins in earnest with reports from major banks JP Morgan (JPM), Wells Fargo (WFC), and BlackRock (BLK) on Friday. .
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Monday, October 7, 2024, 10:40 a.m. (Pacific Daylight Time)
Dow component Travelers sinks along with other insurance companies as Hurricane Milton intensifies to Category 5
Insurance stocks fell on Monday as Milton threatened the Gulf of Mexico and strengthened into a Category 5 hurricane heading toward Florida.
Insurance company Allstate (ALL) and Dow (^DJI) component Travelers (TRV) both fell more than 3%.
Florida-based Universal Insurance (UVE) fell more than 18%.
Meanwhile, crude oil futures extended their gains, rising more than 3% as markets awaited Israeli retaliation against oil-producing Iran after last week’s missile attack.
Chevron (CVX) announced that it has evacuated all employees from its Blind Faith platform in the U.S. Gulf of Mexico and closed the facility in preparation for Hurricane Milton.
Monday, October 7, 2024, 10:15 a.m. (Pacific Daylight Time)
Google is trying to learn how the Justice Department wants to rebuild its empire
Yahoo Finance’s Alexis Keenan reports:
Google (GOOG, GOOGL) is trying to find out what the Department of Justice thinks should be done to break up the tech giant’s grip on the online search market.
Prosecutors plan to file documents outlining potential remedies in federal court as early as Tuesday after successfully arguing in a landmark case that Google engaged in illegal monopolistic behavior.
Click here for details.
Monday, October 7, 2024, 9:30 a.m. (Pacific Daylight Time)
DJT stock soars after Elon Musk appears at Trump rally
Trump Media & Technology Group (DJT) stock rose about 15% on Monday following Elon Musk’s surprise appearance at Donald Trump’s rally in Butler, Pennsylvania, over the weekend. It’s the same place where the former president survived an assassination attempt in July.
The tech billionaire who is CEO of Tesla (TSLA) and SpaceX and also owns social media platform X (formerly Twitter) is outspoken about his support for Trump ahead of next month’s election. . President Trump even said he would consider Musk for a cabinet position, but that the businessman would not be able to serve because “there’s a lot going on.”
At Saturday’s rally, Musk told the audience that Trump is the only candidate who can “defend American democracy,” adding that if Trump doesn’t win, this will be “the last election.” .
The former president remains in a close race with current Vice President and Democratic candidate Kamala Harris, who has just begun making a spate of media appearances in an effort to consolidate recent polling momentum.
Harris appeared on an episode of the popular Gen Z podcast “Call Her Daddy” and did a sit-down interview on “60 Minutes.”
Click here for details.
Monday, October 7, 2024 08:51 PDT
Super microcomputer stocks soar on demand for AI servers
Nvidia (NVDA) customer and AI server maker Super Microcomputer (SMCI) rose as much as 17% on Monday after the company released shipping data.
Super Microcomputer announced Monday morning that it has shipped more than 2,000 high-end servers to large-scale AI data centers since June. The company said it currently sells more than 100,000 AI chip-equipped servers every quarter. This is a sign that demand for AI will not slow down in the short term, as analysts and investors had feared. The server maker said it sells its hardware to “some of the largest AI factories ever built.”
Supermicro’s stock price rally on Monday helped the company rebound from a slump in late September, when the stock fell 15% following reports that the company was being investigated by the U.S. Department of Justice for alleged accounting violations. .
Supermicro stocks soared in early 2024 as Big Tech rushed to develop new generative artificial intelligence technologies as energy demand continued to rise. The stock price has fallen since hitting a high of nearly $120 per share in March.
Monday, October 7, 2024 08:08 PDT
Crude oil extends gains, rising 2% as markets wait for Israeli retaliation against Iran
Oil prices extended their gains on Monday after posting their biggest weekly gain in more than a year in anticipation of Israel’s retaliation for last week’s missile attack on Iran.
West Texas Intermediate futures (CL=F) rose more than 2% to above $76 a barrel, after rising more than 9% last week. Brent crude oil futures (BZ=F), an international benchmark, also rose more than 2%, reaching $80 per barrel for the first time since August.
Tel Aviv has vowed to fight back after Iran fired nearly 200 ballistic missiles at Israel on Tuesday. Traders are pricing in the possibility that Iran’s oil infrastructure will be targeted.
Dennis Kistler, senior vice president of trading at BOK Financial, said on Monday that “Iran’s military has responded that any attack from Israel would provoke an even stronger response from Iran, and therefore has no geostrategic interest in oil.” “The impact of the phase continues to increase.”
Monday, October 7, 2024 7:24 AM PDT
Nvidia rises 1%, Amazon falls 2%, ‘Mag 7’ stocks are mixed
Two of the “Magnificent Seven” mega-cap tech stocks, NVIDIA (NVDA) and Amazon (AMZN), moved in opposite directions on Monday.
Chip giant Nvidia rose more than 1% to more than $126 a share.
E-commerce and cloud giant Amazon fell more than 2% after Wells Fargo downgraded the stock from overweight to equal weight on expectations that advertising revenue would be suppressed.
Growth in Amazon’s cloud division is unlikely to offset the margin headwinds, said Wells Fargo analyst Ken Gawlerski. “AWS strength alone is not enough,” he writes.
Nvidia stock rose more than 1%.
Monday, October 7, 2024 6:30 AM PDT
Stocks open lower as 10-year US Treasury yield rises above 4%
Major stock averages started lower on Monday as the 10-year Treasury yield (^TNX) rose again above 4%.
The Dow Jones Industrial Average (^DJI) fell about 0.3% after hitting a new all-time high on Friday. The S&P 500 (^GSPC) was down about 0.3%, and the tech-heavy Nasdaq Composite Index (^IXIC) was down 0.5%.
The benchmark 10-year Treasury note (^TNX) yield hit 4% for the first time since August, as expectations for another 50 basis point rate cut by the Fed faded after September’s better-than-expected jobs report.
Oil prices posted their biggest weekly gain in more than a year and extended their gains on Monday as markets awaited Israeli retaliation for last week’s Iranian missile attack.
West Texas Intermediate crude oil futures (CL=F) rose more than 1% to above $75 a barrel, after rising more than 9% last week. The international benchmark Brent futures (BZ=F) also rose more than 1%, trading above $79 per barrel.
Monday, October 7, 2024 05:38 PDT
Pfizer stock soars on report that Starboard has acquired $1 billion in stock
Pfizer (PFE) stock rose 2.6% premarket on Monday as investors reacted to multiple media reports that activist investor Starboard Value acquired a $1 billion stake in the pharmaceutical giant.
Starboard has approached Pfizer executives Ian Reid and Frank D’Amelio to help turn the drug company around, various media outlets reported, citing anonymous sources. Pfizer, the maker of the world’s first approved COVID-19 vaccine, has struggled to maintain its post-pandemic advantage. Mr. Reed and Mr. D’Amelio have expressed interest in supporting Starboard, the Wall Street Journal reported. Starboard’s plans and the changes it will make to Pfizer are unclear.
The stock’s early Monday morning move should put the stock on a positive footing this year, but the stock remains well below its 2022 all-time high of nearly $60.
Pfizer is scheduled to report its financial results on October 29th. Wall Street analysts expect the company’s sales to rise about 12% from a year ago to $14.8 billion. Only half of analysts covering the stock have a buy recommendation, according to Bloomberg data.
