U.S. stocks finished mixed on Wednesday after an early rally on softer inflation data lost steam. The Dow Jones Industrial Average and S&P 500 closed lower and ended September with monthly losses, while the Nasdaq Composite held a modest gain. Investors weighed a cooler-than-expected inflation report against rising Treasury yields and higher oil prices, with Micron earnings due after the closing bell.
What Moved Markets
The Dow Jones Industrial Average fell 443.87 points, or 0.86%, to close at 50,906.05. The S&P 500 slipped 19.30 points, or 0.25%, to 7,651.54. The Nasdaq Composite bucked the trend, adding 63.52 points, or 0.24%, to finish at 26,861.06. Small caps lagged, with the Russell 2000 down 0.39%.
The session started on a high note. The Fed’s preferred inflation gauge, the core PCE price index (which strips out food and energy), rose 3.0% in August from a year earlier, below the 3.3% economists expected. Headline PCE came in at 3.4%, also below forecasts. Separate data from ADP showed private employers added 90,000 jobs in September, ahead of the 68,000 expected. Stocks opened higher, and the Nasdaq was up nearly 1% at one point, but buyers faded into the close.
Bond yields remain the main worry. The 10-year Treasury yield hit 5.293% on Tuesday, its highest level since 2007, and the average 30-year fixed mortgage rate reached 7.58%, the highest since November 2023. Goldman Sachs said the softer PCE reading makes an October Fed rate hike unlikely and now expects the next hike in December. Oil also stayed in focus: Brent crude traded near $104 a barrel, up more than 14% in September after a drone attack on a key Saudi pipeline.
Notable Movers
Boeing (BA) gained in early trading after winning a Pentagon and Navy deal worth more than $20 billion to develop the F/A-XX sixth-generation fighter jet. Rival Northrop Grumman (NOC), which was reportedly also in the running, fell about 3.5% in premarket trading.
Moderna (MRNA) dropped more than 6% in premarket trading after Citi downgraded the stock to sell, saying its valuation was hard to justify. Concentrix (CNXC) fell about 10% before the open after missing third-quarter revenue expectations.
Mattel (MAT) traded more than 2% lower and touched a new 52-week low after naming board member Roger Lynch as its next CEO and chairman, effective by Nov. 2.
Meta Platforms (META) is up roughly 29% for September, driven by a positive reception for its new consumer AI agent, Muse.
McDonald’s (MCD) is on track for a monthly decline of more than 11%, as higher inflation and flat restaurant traffic weigh on the stock.
Looking Ahead
All eyes turn to Micron (MU), which reported fiscal fourth-quarter results after the closing bell. Options traders were pricing in a move of about 7% in either direction, and the report will be read closely as a gauge of AI-related chip demand. Investors will also watch Treasury yields, oil prices and upcoming jobs data for clues on how many more rate hikes the Fed may deliver. With the Dow and S&P 500 closing out a losing month, the start of the fourth quarter on Thursday will test whether buyers return.