Closing Stock Market Summary
It was a downbeat day for stocks. The Nasdaq Composite slid 2.0%, trailing the S&P 500 (-1.6%) and Dow Jones Industrial Average (-1.5%). The major indices had been holding up better, however, before some mega cap stocks reversed initial gains.
NVIDIA (NVDA 864.02, -13.55, -1.5%), which was up as much as 1.2% at its high, and Meta Platforms (META 430.17, -2.45, -0.6%), which was up as much as 1.6% at its best level, were among the losing standouts in that respect.
The final sharp move lower in front of the close was related to last minute selling into month-end in de-risking action that has permeated the month. The S&P 500 logged a 4.2% decline in April, the Nasdaq Composite registered a 4.4% loss for the month, and the Dow Jones Industrial Average was 5.0% lower this month.
Today's downside bias in the stock market was driven by a jump in market rates following this morning's data. The Employment Cost Index for Q1 reflected a 1.2% increase in compensation costs versus expectations for a 1.0% increase. This report piled onto recent worries about sticky inflation and about the Fed pushing back its rate cut timeline.
The 2-yr note yield, which is most sensitive to changes in the Fed funds rate, settled eight basis points at 5.05%. The 10-yr note yield settled seven basis points higher at 4.69%.
Just about everything participated in the broad retreat. The equal-weighted S&P 500 declined 1.5% and all 11 S&P 500 sectors finished lower. Eli Lilly (LLY 781.10, +43.90, +6.0%), Corning (GLW 33.38, +1.60, +5.0%), and 3M (MMM 96.51, +4.35, +4.7%) were some exceptions following pleasing earnings results.
Looking ahead, there is a FOMC policy announcement tomorrow followed by Fed Chair Powell's press conference. Market participants will be focused on the tone Mr. Powell takes and on any shifts in rhetoric following recent sticky inflation readings.
- S&P 500:+5.6% YTD
- Nasdaq Composite: +4.3% YTD
- S&P Midcap 400: +2.9% YTD
- Dow Jones Industrial Average: +0.3% YTD
- Russell 2000: -2.6% YTD
Reviewing today's economic data:
- Q1 Employment Cost Index 1.2% (consensus 1.0%); Prior 0.9%
- The key takeaway from the report is that compensation costs accelerated from the fourth quarter, lending to concerns about general price inflation sticking above the Fed's 2% target for longer than expected.
- February FHFA Housing Price Index 1.2%; Prior -0.1%
- February S&P Case-Shiller Home Price Index 7.3% (consensus 6.7%); Prior 6.6%
- April Chicago PMI 37.9 (consensus 44.5); Prior 41.4
- April Consumer Confidence 97.0 (consensus 104.0); Prior was revised to 103.1 from 104.7
- The key takeaway from the report is that consumers are generally more positive about present conditions than they are about future business conditions, job availability, and income, which is a view that could portend a slowdown in discretionary spending should their worries about income security increase.
Market participants will receive the following economic data on Wednesday:
- 7:00 ET: Weekly MBA Mortgage Index (prior -2.7%)
- 8:15 ET: April ADP Employment Change (consensus 175,000; prior 184,000)
- 10:00 ET: March Construction Spending (consensus 0.4%; prior -0.3%) and April ISM Manufacturing Index (consensus 50.0%; prior 50.3%)
- 10:30 ET: Weekly crude oil inventories (prior -6.37 mln)
- 14:00 ET: May FOMC Decision (consensus 5.25-5.50%; prior 5.25-5.50%)