U.S. Stocks Fluctuate Before Closing On Mixed Note

Stocks recovered from an initial move to the downside but gave back ground in the latter part of the trading session on Monday. The major averages eventually ended the day mixed, with the Dow and the S&P 500 falling to their lowest closing levels in over four months.

While the tech-heavy Nasdaq rose 34.52 points or 0.3 percent to 13,018.33, bouncing off a nearly five-month intraday low, the S&P 500 dipped 7.12 points or 0.2 percent to 4,217.04 and the Dow fell 190.87 points or 0.6 percent to 32,936.41.

Stocks initially came under pressure as treasury yields rebounded amid ongoing concerns about the outlook for interest rates.

Following the pullback seen last Friday, the yield on the benchmark ten-year note moved back to the upside, briefly peeking above the key 5 percent level.

The subsequent recovery on Wall Street came as treasury yields turned lower as the day progressed, with the ten-year yield falling into negative territory.

Treasury yields turned lower after Pershing Square’s Bill Ackman said in a post on X, formerly known as Twitter, the hedge fund management company has “covered our bond short.”

“There is too much risk in the world to remain short bonds at current long-term rates,” Ackman added. “The economy is slowing faster than recent data suggests.”

Overall trading activity remained somewhat subdued, however, with a lack of major U.S. economic data likely keeping some traders on the sidelines.

On Friday, the Commerce Department is due to release its report on personal income and spending, which includes readings on inflation said to be preferred by the Federal Reserve.

Traders are also likely to keep an eye on reports on new home sales, durable goods orders, pending home sales and initial jobless claims in the coming days.

The earnings season also continues to pick up steam this week, with a slew of big-name companies due to report their quarterly results.

A steep drop by shares of Chevron (CVX) weighed on the Dow, with the energy giant tumbling by 3.7 percent after announcing an agreement to acquire smaller rival Hess (HES) in an all-stock transaction valued at $53 billion.

Semiconductor giant Intel (INTC) also came under pressure after a report from Reuters said Nvidia (NVDA) has quietly begun designing central processing units that would run Microsoft’s (MSFT) Windows operating system and use technology from Arm Holdings (ARM)

Sector News

Tobacco stocks showed a substantial move to the downside on the day, dragging the NYSE Arca Tobacco Index down by 1.7 percent to its lowest closing level in a year.

Considerable weakness was also visible among transportation stocks, as reflected by the 1.5 percent drop by the Dow Jones Transportation Average.

Oil, networking and biotechnology stocks also saw significant weakness, while some strength was visible among airline stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Monday. Japan’s Nikkei 225 Index slid by 0.8 percent, while China’s Shanghai Composite Index slumped by 1.5 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.’s FTSE 100 Index fell by 0.4 percent, the German DAX Index closed just above the unchanged line and the French CAC 40 Index climbed by 0.5 percent.

In the bond, treasuries showed a significant turnaround after coming under pressure in early trading. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, slid 8.6 basis points to 4.838 percent.

Looking Ahead

Amid another quiet day on the U.S. economic front, trading on Tuesday may be impacted by reaction to the latest earnings news.

3M (MMM), Coca-Cola (KO), Dow (DOW), General Electric (GE), General Motors (GM), Halliburton (HAL), Spotify (SPOT) and Verizon (VZ) are among the companies due to report their quarterly results before the start of trading.

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