10/04/24 Briefing

Wall Street closed mixed on Tuesday, dragged down by financial stocks. Investor mood was cautious ahead of Wednesday’s inflation report and the impending first-quarter earnings season. Two of the major stock indexes ended in the green, while one ended in the red.

The Dow Jones Industrial Average (DJI) fell 9.13 points, or less than 0.1%, to close at 38,883.67. Twenty one components of the 30-stock index ended in positive territory, while nine ended in negative.

The tech-heavy Nasdaq Composite gained 52.68 points, or 0.3%, to close at 16,306.64.

The S&P 500 advanced 7.52 points, or 0.1%, to close at 5,209.91. Nine of the 11 broad sectors of the benchmark index closed in the green. The Real Estate Select Sector SPDR (XLRE), the Utilities Select Sector SPDR (XLU) and the Technology Select Sector SPDR (XLK) increased 1.3%, 0.6% and 0.5%, respectively, while the Financials Select Sector SPDR (XLF) slid 0.6%.

The fear-gauge CBOE Volatility Index (VIX) decreased 1.4% to 14.98. A total of 10.3 billion shares were traded on Tuesday, the same as the last 20-session average. Advancers outnumbered decliners by a 1.44-to-1 ratio on the NYSE.

Over the past few weeks, investors have eagerly awaited signals from Fed officials about when the rate cuts would start. While earlier, there was a widespread consensus about a first rate cut in June, warmer-than-expected inflation numbers in 2024 have ensured that Fed officials are not yet committing to it.

Hence, market participants are eagerly awaiting consumer price index numbers from March, to gauge the direction the central bank will be taking the economy toward. If the numbers come in line with expectations, talks about a June rate cut would again come to the forefront. However, if the inflation metric continues to rise, rate cuts might get delayed further.