Stock Market Today: Dow ends Q3 lower as rising rates, US shutdown fears bite
Investing.com — The Dow closed lower Friday, ending September and the third quarter with a loss as mounting fears about higher for longer Federal Reserve interest rates and a government shutdown rattled investor sentiment.
The Dow Jones Industrial Average fell 0.5%, 158 points, taking losses to about 2.7% for the third quarter. The Nasdaq rose 0.1%, and the S&P 500 fell 0.2%, but ended the quarter about 3.6% and 3.7% respectively.
The House of Representatives failed to pass a short-term spending measure Friday that would have kept the government open until Oct. 31, stoking fears that a government shutdown on Oct. 1 is increasing likely.
A government shutdown is now almost priced in, Morgan Stanley says, and could dent fourth-quarter economic growth.
“A government shutdown is near-consensus in DC, but the question is how long it will last. We “A government shutdown presents the risk that 4Q GDP growth could be negative. They continue to see the Fed on extended hold into 1Q24,” Morgan Stanley added.
The core personal consumption expenditures price index, the Fed's preferred inflation measure, slowed to 0.1% from 0.2%, stoking investor optimism that the tide is starting to turn in the Fed’s fight to bring down inflation.
The ongoing slowdown in “core inflation, the basis for guiding monetary policy, continues on a disinflationary trend, perpetuating the notion the Fed is at or near its terminal level,” Stifel said in a note.
The inflation data pressured Treasury yields, but they still remain supported by expectations that the Fed is set to keep rates higher for longer. The 10-year yield soaredabout 20% on the quarter after dropping below 4% in early July.
Big tech, which has suffered a hit from rising Treasury
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