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Market information is displayed on monitors as a trader works on the trading floor at the New York Stock Exchange (NYSE) in New York City, U.S., April 4, 2024.
Andrew Kelly | Reuters
Stocks slipped Tuesday, the first trading day of October and the fourth quarter, after a surprisingly strong September performance.
The Dow Jones Industrial Average fell 103 points, or 0.3%. The S&P 500 pulled back 0.2% along with the Nasdaq Composite.
The S&P 500 and the Dow notched closing records in the previous session after Federal Reserve Chair Jerome Powell said the central bank is “not on any preset course” when it comes to the next steps for rate policy. He said to expect two more cuts this year — that is, a quarter percentage point each — if the economy performs as anticipated.
September is typically the worst month of the year for stocks, but this time it broke with past trends. All three major averages posted monthly gains, and it was the first positive September for the S&P 500 since 2019. The S&P 500, Dow and Nasdaq Composite also ended the third quarter in positive territory.
The Fed’s move to cut interest rates by a half-point at its latest meeting bolstered stocks’ performance as of late. Investors will now look to September’s nonfarm payrolls report on Friday, which will serve as the next catalyst for the major averages.
“The risk here is likely to the downside,” said Dave Sekera, chief U.S. market strategist at Morningstar. “With the Fed embarking on a monetary easing policy of a 50-basis-point cut instead of the typical 25-basis-point cut, the question really is, ‘Is the Fed seeing more softness in jobs and unemployment than what the market is expecting?'”
Traders were also monitoring a strike by members of the International Longshoremen’s Association on the East and Gulf Coasts. While consumers may not feel the pinch immediately, the stoppage could cost the U.S. economy hundreds of millions of dollars.
On the economic data front, the U.S. Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey for August is due Tuesday morning. The S&P Global U.S. Manufacturing Purchasing Managers’ Index and the ISM Manufacturing PMI readings are also slated for release.
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