Traders work on the floor of the New York Stock Exchange.
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The S&P 500 was flat Thursday as surging rates continued to worry investors as they have during what’s been a very weak month and quarter for stocks.
The broader market index traded just below the flatline. The Dow Jones Industrial Average was little changed. The Nasdaq Composite dipped 0.3%.
The yield on the benchmark U.S. 10-year Treasury hit a fresh 15-year high in early trading Thursday as data out Thursday showed a still resilient labor market with jobless claims coming in less than expected. The stock market has been taking its cues from the bond market lately with any surge in rates raising worries about a recession and sending equities to new lows. The S&P 500 hit the lowest since June this week as the 10-year yield hit its highest since 2007.
Information technology stocks were the biggest laggards in the S&P 500, with the sector last lower by 0.7%. Micron Technology slid more than 4% after offering weak earnings guidance for the current quarter. Key megacap tech shares like Microsoft, Apple and Amazon also declined.
Friday marks the end of what has been a tough trading month and quarter. The Dow is poised to end more than 3% lower on the month and more than 2% lower in the quarter. The S&P 500 is slated to finish the month down 5% and the quarter off by about 4%. The Nasdaq is on pace to finish the month and quarter losing more than 6% and 5%, respectively.
Investors will be turning their attention to the latest personal consumption expenditures price index reading due Friday. The PCE reading is the Federal Reserve’s preferred inflation metric.
The “equity market needs reprieve on the rates front to move higher, and the Fed needs to downshift from their hawkish position for that to happen,” said Ross Mayfield, investment strategy analyst at Baird. “PCE and other inflation data will be critical.”
Wall Street is also keeping an eye on Washington, as lawmaker negotiations on a U.S. spending bill continue before a Oct. 1 deadline. House Speaker Kevin McCarthy told CNBC Thursday morning that he was confident that Congress would avoid a shutdown this weekend, though he criticized a bill proposed by the Senate for not dealing with border security. Traders have their doubts that McCarthy can get his party in the House aligned by the deadline.
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