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Market Snapshot

https://www.briefing.com/stock-market-update

Dow 34299.99 -569.38 (-1.63%)
Nasdaq 14546.68 -423.29 (-2.83%)
SP 500 4352.63 -90.48 (-2.04%)
10-yr Note -6/32 1.546
NYSE Adv 627 Dec 2572 Vol 985.6 mln
Nasdaq Adv 832 Dec 2982 Vol 4.9 bln

Industry Watch
Strong: Energy
Weak: Information Technology, Communication Services, Consumer Discretionary

Moving the Market

-- S&P 500 loses 2% amid continued upwards momentum in long-term interest rates

-- 10-yr yield settles at 1.53% after touching 1.56%, while energy prices significantly pared early gains

-- Consumer confidence decreases further in September

S&P 500 falls 2% as rising Treasury yields unnerve investors
28-Sep-21 16:20 ET
Dow -569.38 at 34299.99, Nasdaq -423.29 at 14546.68, S&P -90.48 at 4352.63

[BRIEFING.COM] The S&P 500 fell 2.0% on Tuesday, closing at session lows, as another increase in long-term interest rates disproportionately affected the growth stocks and undercut general risk sentiment. The Nasdaq Composite declined 2.8%, the Russell 2000 declined 2.3%, and the Dow Jones Industrial Average declined 1.6%.

The 10-yr yield settled higher by five basis points to 1.53% after touching 1.56% in the morning, as selling interest remained influenced by expectations for sustained inflation and an eventual Fed tapering. The 2-yr yield also closed higher, finishing up two basis points to 0.30%. The U.S. Dollar Index rose 0.3% to 93.70.

The S&P 500 information technology (-3.0%) and communication services (-2.8%) sectors, where several of the mega-cap growth stocks reside, led the retreat with 3% declines. The energy sector (+0.5%) was the only sector that closed higher, even as oil prices coughed up early gains.

WTI crude futures settled lower by 0.1%, or $0.10, to $75.29/bbl after being up 1.7% intraday. Natural gas futures settled higher by 1.4% to $5.82/MMBtu after being up 10% intraday. The early momentum in energy prices fed into the inflation expectations that drove rates higher.

Unlike yesterday, the weakness wasn't constrained to the highly-valued growth stocks (the Russell 1000 Value Index fell 1.3%), which seemed to engender some concerns about further downside. Reflecting the latter concerns, the CBOE Volatility Index (23.25, +4.49, +23.9%) spiked above the 23.00 level amid increased hedging interest.

The extent and scope of the selling might have been exacerbated by other negative-sounding developments:

The Conference Board's Consumer Confidence Index dropped to 109.3 in September (Briefing.com consensus 114.4) from 115.2 in August, the S&P 500 broke below its 50-day moving average (4444), and Senator Warren (D-MA) told Fed Chair Powell she won't support his renomination because she believes the Fed chair made the banking system less safe.

Both Fed Chair Powell and Treasury Secretary Yellen testified before the Senate Banking Committee today. Mr. Powell reiterated his view that inflation pressures should remain elevated before moderating closer to the Fed's 2% longer-run goal. Ms. Yellen said the Treasury's resources will likely be exhausted by Oct. 18 if the debt ceiling isn't addressed.

Reviewing Tuesday's economic data:

The Conference Board's Consumer Confidence Index dropped to 109.3 in September (Briefing.com consensus 114.4) from an upwardly revised 115.2 (from 113.8) in August. Concerns about the Delta variant were cited as a factor that continued to dampen consumer optimism.
The key takeaway from the report is the expectation that consumer spending is apt to be curtailed given that consumer confidence has fallen in back-to-back months.
The Advance report for International Trade in Goods for August showed a deficit of $87.6 billion, versus a revised $86.8 billion (from $86.4 billion) in July. The Advance report for Retail Inventories for August increased 0.1%, while the Advance report for Wholesale Inventories for August increased 1.2%.
The July FHFA Housing Price Index increased 1.4% m/m following a revised 1.7% increase (from 1.6%) in June.
The July S&P Case-Shiller Home Price Index was up 19.9% yr/yr following a 19.1% increase in June.

Looking ahead, investors will receive Pending Home Sales for August and the weekly MBA Mortgage Applications Index on Wednesday.

S&P 500 +15.9% YTD
Russell 2000 +12.9% YTD
Nasdaq Composite +12.9% YTD
Dow Jones Industrial Average +12.1% YTD

WTI crude futures cough up early gain and settle lower
28-Sep-21 15:30 ET
Dow -466.30 at 34403.07, Nasdaq -359.06 at 14610.91, S&P -74.90 at 4368.21

[BRIEFING.COM] The S&P 500 is down 1.7% while the Russell 2000 is down 1.5%.

One last look at the S&P 500 sectors shows information technology (-2.5%) and communication services (-2.4%) down more than 2.0%, while the energy sector (+0.6%) remains the only sector holding onto a gain.

WTI crude futures settled lower by 0.1%, or $0.10, to $75.29/bbl after being up 1.7% intraday.