By Johann M Cherian and Purvi Agarwal
(Reuters) – The benchmark and the Nasdaq slipped on Tuesday, as investors digested a weak consumer confidence report and mulled on the Federal Reserve’s next policy move, while mining stocks got a boost after China unveiled a sweeping stimulus package.
A Conference Board report showed an index tracking consumer confidence stood at 98.7 in September, compared with estimates of 104 as per economists polled by Reuters. The index was revised to 105.6 for the month before.
Rate-sensitive growth stocks such as Amazon.com (NASDAQ:), Meta (NASDAQ:) and Microsoft (NASDAQ:) lost over 1% each following the data as yield on short-term Treasury bonds were steady.
Still, the benchmark S&P 500 and the blue-chip Dow were hovering near record highs as data earlier in the week pointed to a robust economy overall, and as a number of policymakers supported further policy easing by the Fed.
At 10:16 a.m., the rose 6.17 points, or 0.02%, to 42,133.64, the S&P 500 lost 9.20 points, or 0.17%, to 5,708.95 and the lost 38.86 points, or 0.22%, to 17,935.41.
The Russell 200 index, tracking small caps, gained 0.3%.
Seven out of the 11 S&P 500 sectors trended downwards, although material stocks outperformed peers with a 1.1% rise.
Metal prices got a boost after the world’s second-largest economy, China, unveiled its biggest stimulus since the pandemic to pull the economy out of its deflationary funk.
and lithium miners such as Freeport-McMoRan (NYSE:) added 5.9%, Southern Copper (NYSE:) rose 7.1% and Albemarle (NYSE:) advanced 4.2% and Arcadium climbed 5.8%.
Striking some caution, Fed Governor Michelle Bowman cautioned that key measures of inflation remained “uncomfortably above” the Fed’s 2% target, warranting caution as the Fed proceeds with cutting interest rates.
Market pricing for the Fed’s November decision is reduced to a coin toss, with bets neither strongly favoring a 50 bps nor a 25 bps reduction, as per the CME Group’s (NASDAQ:) FedWatch Tool.
“Between now and the time the Fed meets, we’ll have a couple of jobs reports. They’ve told us unemployment now is the thing that’s driving rate cut decisions. The soft landing is when unemployment doesn’t start skyrocketing,” said Kim Forrest, chief investment officer at Bokeh Capital Partners.
Later in the week, investors will parse weekly jobless claims and personal consumption expenditure data.
The three main indexes are set for monthly gains and defy the historical trend of September being a weaker month for equities, after the Fed commenced its easing cycle last week, sparking a market rally.
Among stocks, U.S.-listed shares of Chinese firms such as Alibaba (NYSE:) rose 5.3%, PDD Holdings added 6.4% and Li Auto (NASDAQ:) advanced 7.8%, tracking gains in the domestic market.
Visa (NYSE:) lost 4% after a report showed the U.S. Department of Justice plans to file a lawsuit against the payments network operator, alleging that it illegally monopolized the country’s debit card market.
It weighed on the financial sector that slipped 0.6%.
Advancing issues outnumbered decliners by a 1.62-to-1 ratio on the NYSE and by a 1.3-to-1 ratio on the Nasdaq.
The S&P 500 posted 34 new 52-week highs and no new lows, while the Nasdaq Composite recorded 53 new highs and 45 new lows.
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