U.S. Major Averages Rest, Investors Dial Down Rate Cut Expectations Amid Strong U.S. Economy

Barry Adams
03 Apr, 2024
New York City

Stocks on Wall Street struggled to advance, and major indexes traded sideways as investors debated the future rate path and interest rate levels. 

The S&P 500 index and the Nasdaq Composite traded around flatline in early trading as investors dialed back rate-cut expectations amid stronger-than-expected manufacturing and jobs market data following a sticky inflation report in the previous week. 

Despite eleven rate cuts over the last two years, inflation has moderated but stayed above the Fed's preferred target rate of 2%. 

Moreover, policymakers may keep interest rates unrevised because of resilient economic conditions and a moderating but healthy labor market. 

U.S. Treasury yields held steady and approached a five-month high after investors walked away from rate-cut expectations. 

The private sector added more than expected jobs in March, according to the latest monthly update released by payroll processing firm ADP on Wednesday morning. 

Companies expanded payrolls by 184,000 in March, faster than the revised 155,000 increase in February. 

However, the ADP data series is highly volatile and subject to severe revisions. 

 

U.S. Indexes and Yields

The S&P 500 index decreased 0.1% to 5,202.45, and the Nasdaq Composite fell 0.3% to 16,190.98. 

The yield on 2-year Treasury notes hovered at 4.72%, 10-year Treasury notes inched up to 4.39%, and 30-year Treasury bonds edged up to 4.53%.

WTI crude oil increased $0.39 to $85.83 a barrel, and natural gas prices increased 2 cents to $1.87 a thermal unit.

Gold decreased by $12.24 to $2,268.60 an ounce, and silver rose 6 cents to $26.21. 

The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 104.75.

 

U.S. Stock Movers

Intel declined 5.2% to $41.65 after the advanced semiconductor maker reported a wider loss in its foundry operation. 

Operating loss in 2023 expanded to $7.0 billion from $5.2 billion in 2022, after sales in 2023 plunged to $18.9 billion from $27.5 billion in the previous year. 

Dave & Buster's gained 6.3% to $65.80 after the company reported its latest quarterly results. 

Revenue in the fiscal fourth quarter ending on February 4, which included the 14th week, rose 6.3% to $599.1 million, net income declined to $36.2 million from $39 million, and diluted earnings per share rose to 88 cents from 80 cents a year ago. 

The 14th week in the fourth quarter, also the 53rd week in the fiscal year, contributed $39.5 million in revenue. 

Cal-Maine jumped 5.6% to $62.46 after egg producers reported better-than-expected quarterly results. 

Revenue in the fiscal third quarter ending on March 2 decreased to $703.1 million from $997.5 million, bet income plunged to $146.4 million from $322.7 million, and diluted earnings per share dropped to $3.0 from $6.62 a year ago. 

The net average selling price per dozen of eggs declined to $2.24 from $3.30 a year ago.