Wall Street stocks struggled to advance on Monday, as the Federal Reserve’s “higher for longer” interest rate strategy continued to pile on pressure as a US government shutdown loomed.
In midday trading, the S&P 500 (^GSPC) was flat, while the Dow Jones Industrial Average (^DJI) was down 0.1%. The Nasdaq Composite (^IXIC) gained about 0.1%. The 10-year Treasury yield (^TNX) touched its highest levels since 2007.
Oil prices have resumed their rally, raising the prospect of inflation staying high — and that has fired up debate about whether the Fed will find itself restricted from cutting rates in the near term. Investors are now getting ready for a fresh read on PCE inflation due out Friday for more insight.
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.
Meanwhile, Sunday’s tentative deal to end the Hollywood writers’ strike lifted media stocks in the early going. 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 buy of ETraveli was blocked by the EU antitrust regulator.
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.
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.
Paramount, Nike, and Warner Bros.: Stocks trending in premarket trading
Here are some of the stocks leading Yahoo Finance’s trending tickers page in premarket trading on Monday:
Paramount (PARA): Shares in Paramount rose by 2% in premarket trading after it was announced that union leaders and Hollywood studios reached a tentative agreement Sunday to end a historic screenwriters strike.
Warner Bros. Discovery (WBD): Shares in Warner Bros. Discovery rose 2% as the screenwriters strike looked set to come to an end.
Nike (NKE): Nike shares were down almost 2% after Jefferies downgraded Nike to a Hold today. The athletic footwear and apparel company will release its quarterly earnings on Thursday.
Stock futures point slightly lower
The major US stock benchmarks were trading flat but shaping up to begin the last week of a tough month in the red, as focus stays firmly on the Fed’s hawkish outlook for interest rates.