Stocks opened lower Monday, giving back some of the gains posted during the previous session’s post-jobs-report surge, while Treasury yields rose as expectations for interest rate cuts eased.
The Dow Jones Industrial Average and S&P 500 were both down 0.3%, while the Nasdaq Composite fell 0.4%. The major indexes closed sharply higher on Friday, putting them into positive territory for the week, after a better-than-expected September jobs report reinforced the idea that U.S. economy is headed for a soft landing. The Dow finished the week at an all-time closing high, and the S&P 500 is just shy of a record of its own.
Mega-cap technology stocks were mixed in early trading Monday. Shares of Apple (AAPL) were down about 1% following a downgrade from Jefferies, while Amazon (AMZN) slumped nearly 3% after having its rating cut by Wells Fargo. Microsoft (MSFT) and Alphabet (GOOGL) were also lower, while AI investor favorite Nvidia (NVDA) and Meta Platforms (META) rose slightly. Meta hit a new all-time high in early trading.
The economic data calendar is light on Monday but picks up significantly later in the week with the release of closely watched inflation data and the latest reading on consumer sentiment. Investors will be watching the numbers closely for further confirmation that the economy is on sound footing, while also looking for clues about how aggressive the Federal Reserve will be as it cuts interest rates. The Fed cut its benchmark fed funds rate for the first time in four years last month.
Following the strong jobs repot on Friday, market expectations for the Fed to make deep cuts in the coming months fell significantly. Market participants now believe it’s likely the Fed will make two quarter-percentage-point cuts in the benchmark rate before the end of the year, according to fed fund futures trading data. Before the jobs report, markets were pricing in the likelihood that the central bank would announce a half-point cut at the Fed’s next policy meeting in November, as well as a cut in December.
The yield on 10-year Treasurys, which is sensitive to expectations around where interest rates are headed, moved above 4% on Monday for the first time in two months.
Crude oil futures were up about 1.5%, extending a rally that picked up steam last week amid growing concerns about conflict in the Middle East possibly disrupting oil production.
Gold futures were up slightly at around $2,670, while bitcoin was little changed and trading near $63,000.
Read More: Major Stock Indexes Open Lower as Treasury Yields Rise