Reuters/Brendan McDermid
- US stocks were volatile on Monday as investors mulled higher interest rates and a looming government shutdown.
- The government appears on track to shutdown by October 1 without a deal on spending for the coming year.
- Major indexes clawed back the steepest losses to end slightly higher on the day.
US stocks ended the trading session slightly higher on Monday as investors eyed risks stemming from higher-for-longer interest rates and the growing odds of a government shutdown.
Trading was volatile throughout the day, with stocks retracing their steepest losses to end the day narrowly in the green.
The S&P 500 is down around 4% for the month. That puts the index track to notch its second-straight month of losses, and in line for its its worst monthly performance since the start of 2023.
Markets have been jittery over the prospects of higher-for-longer interest rates from the Fed, which have sent bond yields surging in September. Yields on the 10-year US Treasury rose another 10 basis points on Monday to 4.544%, while yields on the two-year US Treasury rose t to 5.136%.
Recession risks are also front-of-mind as higher interest rates signal tight financial conditions. The New York Fed has priced in a 61% chance the US will fall into a downturn by August of next year. Meanwhile, revised GDP data is set to roll out this Thursday, which could give more insight into economic growth trends.
Markets are also closely watching Congress' progress on passing a budget for the next fiscal year. As of now, a government shutdown is looking more likely than not, some commentators say, which could spark short-term downside for stocks as well as headwinds to economic growth over the coming quarter.
Here's where US indexes stood at the 4:00 p.m. closing bell on Monday:
- S&P 500: 4,337.44, up 0.4%
- Dow Jones Industrial Average: 34,006.88, up 0.13% (+43.04 points)
- Nasdaq Composite: 13,271.32, up 0.45%
Here's what else is going on today:
- CHART OF THE DAY: The S&P 500's top 7 stocks have soared more than 50% in 2023, while everything else is 'basically flat."
- The US economy faces four key risks that could plunge it into a recession.
- Warren Buffett's eye for quality stocks like Apple and Coca-Cola is the key to his success, Jeremy Grantham said.
- The US's ballooning debt problem means its economy could end up like China's, according to one market expert.
- The surge in oil prices isn't going to derail the US economy, according to Goldman Sachs.
In commodities, bonds, and crypto:
- West Texas Intermediate crude oil slipped 0.1% to $89.92 a barrel. Brent crude, the international benchmark, inched higher 0.15% to $93.40 a barrel.
- Gold fell 0.5% to $1,934.80 per ounce.
- The yield on the 10-year Treasury bond jumped 10 basis points to 4.542%.
- Bitcoin dipped 0.7% to $26,294.