The Dow Jones Industrial Average and S&P 500 ended the first day of September on a high note as traders eagerly awaited Friday’s jobs report.
The Dow pared its losses from the start of the day, struggling with the flatline through the close and surging 145.99 points, or nearly 0.5%, in the final minutes of trading to 31,656, 42. The S&P 500 rebounded 0.3% to 3,966.85, after trading lower for most of the day. The two ended a four-game losing streak.
Meanwhile, the Nasdaq Composite fell about 0.3% to 11,785.13 to post its first five-day losing streak since February. He came back again from deeper losses earlier in the session.
All major averages are on track to end the week lower. The Dow is expected to post a decline of 1.9%, while the S&P and Nasdaq are expected to end down 2.2% and 2.9%, respectively.
The moves came as the 2-year US Treasury yield rose above 3.5%, the highest level since November 2007, on Thursday. This weighed on rate-sensitive growth stocks, making future earnings less attractive.
Nvidia shares also contributed to the losses, falling nearly 7.7% a day after the chipmaker said the US government was restricting some sales to China.
Stocks fell as investors reacted to hawkish comments from Fed officials showing no signs of easing interest rate hikes. Traders are wondering if equities will challenge June lows again in September, a historically poor month for markets.
“The June lows are in play in the weeks ahead as equity investors finally recognize the intensity of the Fed’s mission,” said John Lynch, chief investment officer at Comerica Wealth Management. “Inflation and recession are usually accompanied by lower market multiples and markets need to reassess valuation as interest rates rise.”
“A successful test of the June lows could also prove important as the formation of the double bottom could help alleviate fears of further volatility in the months ahead,” Lynch added. “We believe the consensus earnings forecast for next year is too high and technical support will be needed as the forecast declines.”
Read the coverage of the mercado de hoy en español here.