Wall Street stocks recovered Monday, shaking off some of the worries around the Federal Reserve's "higher for longer" interest rate strategy.
At the closing bell, the S&P 500 (^GSPC) was up 0.4%, while the Dow Jones Industrial Average (^DJI) gained a more modest 0.1%. The Nasdaq Composite (^IXIC) was up 0.5%. The 10-year Treasury yield (^TNX) touched its highest levels since 2007, closing above 4.5%.
Investors are now getting ready for a fresh read on PCE inflation due out Friday for more insight into the Fed's rate path.
Meanwhile, with less than a week left to avert a government shutdown, investors are starting to assess its potential impact on the economy, given there's little sign of progress on a budget agreement by lawmakers. A reading on second quarter GDP is scheduled for Thursday.
Sunday's tentative deal to end the Hollywood writers strike moved media stocks. But there's less optimism around the autoworkers strike after Ford (F) said despite progress in some areas, there are "significant gaps to close" before it can reach a new labor agreement with the UAW.
Elsewhere, signs of growing debt woes at Chinese property developers — Evergrande, in particular — rattled nerves about the impact on the world's second-biggest economy.
Eyes are also on Booking Holdings (BKNG), whose brands include Booking.com and Priceline, after its proposed $1.7 billion purchase of Etraveli was blocked by the EU antitrust regulator.
Stocks up slightly to start last week of a rough September
Wall Street finished the day in positive territory as investors settled into expectations about the Fed's tightening campaign.
The S&P 500 (^GSPC) edged higher by 0.4%, while the Dow Jones Industrial Average (^DJI) climbed above the flat line, gaining 0.1%, or about 40 points. The tech-heavy Nasdaq Composite (^IXIC) gained about 0.5%.
The AI-powered future is bright, according to Goldman interns
In contrast to a prevailing sense that AI technology will usher into reality several episodes of Black Mirror, there's a group of bright, young professionals who think AI will leave society better off: Goldman Sachs interns.
According to a new survey of 2,000 summer analysts and associates at Goldman, 81% believe AI will have a net positive impact on society. And 86% said they are already using AI tools in their personal lives.
Of course, such tech-forward views may reflect the social and professional circles interns at a premier global financial institution travel in. The survey also showed that Goldman interns consider LinkedIn their second favorite place to post, behind only Instagram. And more than three-quarters of respondents said curated newsletters help cut through the noise and focus on whats important. Nearly half the interns said they regularly listen to podcasts.
The survey quizzed the interns on a range of topics, from their views on online shopping (61% prefer to shop in-person, versus 39% online) to where they met or think they will meet their significant other (55% in person; 24% mutual acquaintance; 6% apps), to their thoughts on a coming downturn (53% believe a US recession is on the horizon, down from the 86% who predicted a recession last year).
The interns were also asked what would have the most pronounced impact on the world over the next 10 years. Ahead of dwindling resources, geopolitical tensions and even climate change, more than a third of the Goldman interns said AI.
Student loan repayments could weigh on retail sales
With monthly student loan payments set to resume in October, consumers are planning to spend less money at retailers.
In a survey of more than 600 US consumers that have outstanding student debt, nearly 90% of respondents said they were at least "somewhat concerned" about meeting all their monthly expenses. Half of those surveyed said they were "very concerned," according to new research from Jefferies, which downgraded Nike and other retail stocks.
Jefferies found more than half of respondents plan to spend less on apparel and accessories, while restaurants and footwear were the second and third most frequently listed categories where consumers plan to spend less.
"We believe there could be meaningful headwinds to growth in these categories, particularly in 2H23 [which includes the crucial holiday season]," Jefferies US consumer team wrote in a new research note on Monday.
Biden prepares to visit picket line in support of autoworkers
President Joe Biden is planning to travel to Michigan on Tuesday to support the United Auto Workers strike, in a move of solidarity that labor experts say marks the first time a sitting president has visited a strike in at least 100 years.
Highlighting the strike's economic importance and its highly visible role in the political world, Biden's trip will come a day before former President Donald Trump says he will visit with autoworkers in Detroit on Wednesday, as he skips the second Republican presidential debate.
The dueling visits arrive on the heels of an escalation of the strike. Last week, the UAW extended its strike action to dozens of parts distribution centers across the US. Union leader Shawn Fain said the walkouts would hit 38 sites owned by General Motors and Stellantis, as the conflict over pay and benefits that began earlier this month continues. The move excluded Ford, which the UAW said was making more progress in talks.
Stocks trending in afternoon trading
Here are some of the stocks leading Yahoo Finance’s trending tickers page in afternoon trading on Monday:
Rite Aid (RAD): Shares of the drugstore chain tumbled 20% Monday afternoon following reports that the company is negotiating a bankruptcy plan that would include liquidating a substantial portion of its more than 2,100 drugstores.
Costco (COST): The warehouse retailer edged down about 0.3% ahead of company earnings on Tuesday. Over the last six months the stock has risen about 13%.
Paramount (PARA): Shares in Paramount fell by 1% in afternoon trading after union leaders and Hollywood studios reached a tentative agreement Sunday to end a historic screenwriters strike. However, the terms of the deal have not yet been shared publicly and entertainment company stocks have reacted to the initial agreement with mixed results. Shares of Warner Bros. Discovery (WBD) fell by 2.8%, Disney (DIS) slipped by about 0.4% while Netflix (NFLX) gained, climbing 1%.
Nike (NKE): Nike shares slipped 0.2% after Jefferies downgraded the company to Hold from Buy and cut its price target to $100.00 from $140.00, citing ongoing pressure in wholesale, macroeconomic challenges in China, and consumer survey results suggesting reduced spending in the US, particularly in apparel and footwear. The company is set to release its quarterly earnings on Thursday.
Stocks inch upward in afternoon trading
Wall Street reversed course during afternoon trading on Monday, finding positive territory as investors tempered their expectations about the Fed's tightening campaign.
Amazon to invest up to $4 Billion in AI Startup Anthropic
Amazon is investing up to $4 billion in the artificial intelligence company Anthropic, marking the latest effort by a tech giant to beef up its partnerships in generative artificial intelligence.
As part of the deal, Anthropic will shift most of its software to Amazon Web Services and will use Amazon's chips to train its artificial intelligence models that power chatbots and other technologies. Amazon will receive partial ownership of the startup and its investment will help cover the costs of developing and deploying massive AI models.
“With today’s announcement, customers will have early access to features for customizing Anthropic models, using their own proprietary data to create their own private models, and will be able to utilize fine-tuning capabilities via a self-service feature,” Amazon said in a release.
The deal highlights big tech's ambitions in developing AI technology, and the ability of tech giants to use their cloud computing resources for AI goals. Amazon's move follows Microsoft's investments in OpenAI, the maker of ChatGPT. Earlier this year Microsoft announced a $10 billion investment in OpenAI and launched a push to bring AI technology into consumer-facing Microsoft products, like Bing.
Stocks trending in morning trading
Here are some of the stocks leading Yahoo Finance’s trending tickers page in morning trading on Monday:
Paramount (PARA): Shares in Paramount fell by 3.2% in morning trading after union leaders and Hollywood studios reached a tentative agreement Sunday to end a historic screenwriters strike. However, the terms of the deal have not yet been shared publicly and entertainment company stocks have reacted to the initial agreement with mixed results. Shares of Warner Bros. Discovery (WBD) fell by 3.6%, Disney (DIS) slipped by about 0.75% while Netflix (NFLX) gained, climbing 0.5% during morning trading.
NIO (NIO) The electric vehicle maker fell by 2.3% even as the company tried to calm speculation that it was raising capital from investors. "In light of the unusual market activity in the Company’s American depositary shares today, the Company would like to clarify that the Company currently has no reportable capital raising activity," Nio said in a statement Monday.
Nike (NKE): Nike shares slipped 0.5% after Jefferies downgraded the company to Hold from Buy and cut its price target to $100.00 from $140.00, citing ongoing pressure in wholesale, macroeconomic challenges in China, and consumer survey results suggesting reduced spending in the US, particularly in apparel and footwear. The company is set to release its quarterly earnings on Thursday.
Hollywood writers reach tentative deal to end strike
The writers strike that froze much of the entertainment world for almost 150 days appears to be nearing an end.
The details of the deal with the Alliance of Motion Picture and Television Producers (AMPTP), which bargains on behalf of the major studios, including Warner Bros. (WBD), Disney (DIS), and Netflix (NFLX), have not yet been released as the two sides are still drafting final contract language.
The Writers Guild of America (WGA) had been fighting for higher compensation, increases to streaming residuals, transparency around viewership data, a guaranteed minimum length of employment, writing room staffing requirements, and further protections surrounding the use of artificial intelligence.
Meanwhile, the actors strike, which is still ongoing, is largely expected to reach a similar conclusion, although the union, SAG-AFTRA, said to members in an e-mail on Sunday, “While we look forward to reviewing the WGA and AMPTP’s tentative agreement, we remain committed to achieving the necessary terms for our members.”
Stocks open lower to cap a bruising September
The final trading week of the month kicked off with stocks sliding on Monday, setting investors up for a losing month where much of the optimism of the early summer has fizzled into more tempered expectations of the Fed's tightening campaign.