Stock markets today: Dow, S&P 500, Nasdaq slip as investors reconsider rate cut bets

U.S. stocks slipped on Monday as investors reconsidered their views on interest rate cuts after a blowout jobs report a week ahead of key inflation data and the start of the earnings season.

The Dow Jones Industrial Average (^DJI) fell 0.3% after hitting a fresh record high as stocks closed the week. The S&P 500 (^GSPC) fell roughly 0.3%, while the tech-heavy Nasdaq Composite (^IXIC) led losses with a 0.4% decline.

Hopes of an outsize rate cut from the Federal Reserve faded after September's better-than-expected jobs report allayed concerns about cracks in the labor market. The benchmark 10-year Treasury yield (^TNX) hit 4% for the first time since August amid doubts about the Fed's next move.

Read more: What Fed Rate Cuts Mean for Bank Accounts, CDs, Loans and Credit Cards

According to the CME FedWatch tool, traders abandoned last week's bets on a 0.50% rate cut in November and now see an 88% chance of a 0.25% move. Those expectations could be a drag on stocks, which hit records amid big rate cuts and confidence that an economic “soft landing” was on the table.

Thursday's October consumer inflation report is awaited to provide fresh insight into whether the Fed is making progress on easing already-cool price pressures to its 2% target.

The focus is on the start of third-quarter earnings as Goldman Sachs ( GS ) raised its target for the S&P 500, expecting higher margin growth for corporate companies. After Thursday's Pepsi ( PEP ) results, the season kicked off in earnest on Friday with reports from big banks JPMorgan ( JPM ), Wells Fargo ( WFC ), and BlackRock ( BLK ).

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Mon, Oct 7, 2024 at 6:30 am PDT

Stocks opened lower as the 10-year Treasury yield topped 4%

Major averages opened lower on Monday as the 10-year Treasury yield (^TNX) rose above 4%.

The Dow Jones Industrial Average (^DJI) fell about 0.3% after hitting fresh record highs on Friday. The S&P 500 (^GSPC) fell about 0.3%, while the tech-heavy Nasdaq Composite (^IXIC) fell 0.5%.

The yield on the benchmark 10-year Treasury ( TNX ) hit 4% for the first time since August, as hopes of another 50 basis point rate cut from the Federal Reserve faded after a strong-anticipated September jobs report.

Oil prices rose on Monday after their biggest weekly gain in more than a year as markets awaited Israeli retaliation against Iran's missile barrage last week.

West Texas Intermediate crude futures (CL=F) advanced more than 1% to trade above $75 a barrel, after rising more than 9% last week. Brent futures (BZ=F), the international benchmark, advanced another 1% to trade above $79 a barrel.
Mon, Oct 7, 2024 at 5:38 AM PDT

Pfizer stock jumped on reports of a $1 billion stake in Starboard

Pfizer ( PFE ) stock rose 2.6% in pre-market Monday, as investors reacted to multiple media reports that activist investor Starboard Value took a $1 billion stake in the pharmaceutical giant.

Starboard has approached Pfizer executives Ian Rand and Frank D'Amelio to help the drugmaker turn the tide, various media outlets reported, citing unnamed sources. Pfizer, the maker of the world's first-approved COVID-19 vaccine, has struggled to maintain its dominance post-pandemic. Rand and D'Amelio have expressed interest in helping Starboard, The Wall Street Journal reported. Starboard's plans and the changes it will make to Pfizer are unclear.

The stock's move Monday morning would bring it positive for the year, but shares are well below record highs near $60 in 2022.

Pfizer is set to report earnings on October 29. Wall Street analysts expect the company to report revenue of $14.8 billion, up about 12% from a year earlier. According to Bloomberg data, only half of analysts who cover the stock recommend buying it.