Wall Street stocks struggled to advance on Monday, as the Federal Reserve’s “higher for longer” interest rate strategy continued to pile on pressure as a US government shutdown loomed.
At the opening bell, the S&P 500 (^GSPC) and the Dow Jones Industrial Average (^DJI) were both down about 0.3%, after losing grip of earlier gains as 10-year Treasury yields (^TNX) jumped to their highest levels since 2007. The Nasdaq Composite (^IXIC) fell about 0.4%.
Oil prices have resumed their rally, raising the prospect of inflation staying high — and that has fired up debate about whether the Fed will find itself restricted from cutting rates in the near term. Investors are now getting ready for a fresh read on PCE inflation due out Friday for more insight.
Read more: What the Fed rate-hike pause means for bank accounts, CDs, loans, and credit cards
With less than a week left to avert a government shutdown, investors are starting to assess its potential impact on the economy, given there’s little sign of progress on a budget agreement by lawmakers. A reading on second-quarter GDP is scheduled for Thursday.
Meanwhile, Sunday’s tentative deal to end the Hollywood writers’ strike lifted media stocks in the early going. But there’s less optimism around the autoworkers’ strike, after Ford (F) said despite progress in some areas, there are “significant gaps to close” before it can reach a new labor agreement with the UAW.
Elsewhere, signs of growing debt woes at Chinese property developers — Evergrande, in particular — rattled nerves about the impact on the world’s second-biggest economy.
In individual stocks, Amazon (AMZN) has signed a deal to invest up to $4 billion in startup Anthropic, pulling in a crucial partner in its push to become a major player in AI.
Eyes are also on Booking Holdings (BKNG), whose brands include Booking.com and Priceline, after its proposed $1.7 billion buy of ETraveli was blocked by the EU antitrust regulator.
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The writers’ strike that froze much of the entertainment world for almost 150 days appears to be nearing an end.
Hollywood writers reached a tentative agreement with studios on Sunday to stop a historic strike that started in early May, Yahoo Finance’s Allie Canal reports.
The details of the deal with the Alliance of Motion Picture and Television Producers (AMPTP), which bargains on behalf of the major studios, including Warner Bros. (WBD), Disney (DIS), and Netflix (NFLX), have not yet been released as the two sides are still drafting final contract language.
The Writers Guild of America (WGA) had been fighting for higher compensation, increases to streaming residuals, transparency around viewership data, a guaranteed minimum length of employment, writing room staffing requirements, and further protections surrounding the use of artificial intelligence.
Meanwhile, the actors strike, which is still ongoing, is largely expected to reach a similar conclusion, although the union, SAG-AFTRA, said to members in an e-mail on Sunday, “While we look forward to reviewing the WGA and AMPTP’s tentative agreement, we remain committed to achieving the necessary terms for our members.”
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Stocks open lower to cap a bruising September
The final trading week of the month kicked off with stocks sliding on Monday, setting investors up for a losing month where much of the optimism of the early summer has fizzled into more tempered expectations of the Fed’s tightening campaign.
The S&P 500 (^GSPC) edged lower by 0.2%, while the Dow Jones Industrial Average (^DJI) decreased 0.2% or 70 points.The tech-heavy Nasdaq Composite (^IXIC) lost 0.3%.
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Paramount, Nike, and Warner Bros.: Stocks trending in premarket trading
Here are some of the stocks leading Yahoo Finance’s trending tickers page in premarket trading on Monday:
Paramount (PARA): Shares in Paramount rose by 2% in premarket trading after it was announced that union leaders and Hollywood studios reached a tentative agreement Sunday to end a historic screenwriters strike.
Warner Bros. Discovery (WBD): Shares in Warner Bros. Discovery rose 2% as the screenwriters strike looked set to come to an end.
Nike (NKE): Nike shares were down almost 2% after Jefferies downgraded Nike to a Hold today. The athletic footwear and apparel company will release its quarterly earnings on Thursday.
Evergrande Group (3333.HK): Evergrande’s share price plunged 21% after it announced it had scrapped key creditor meetings at the last minute and said it must revisit its restructuring plan.
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KStock futures point slightly lower
The major US stock benchmarks were trading flat, but shaping up to begin the last week of a tough month in the red, as focus stays firmly on the Fed’s hawkish outlook for interest rates.
Dow Jones Industrial Average (^DJI) futures were down 0.06%, or 15 points, while S&P 500 (^GSPC) futures slipped 0.05%. Nasdaq 100 futures dipped 0.08%.
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