[New York Stock Market] 'Cruel September' S&P 500 Hits New Monthly Low... Down 9.5% Over the Month

[Image source=Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] Major indices of the U.S. New York stock market closed lower on the 30th (local time), ending September on a downtrend.

The Federal Reserve's preferred inflation indicator showed an upward trend, reigniting concerns over high-intensity tightening and the resulting economic slowdown. The S&P 500 index hit a new yearly low, with a monthly drop exceeding 9% in September.

On this day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average fell 500.10 points (1.71%) from the previous close to finish at 28,725.51. The large-cap S&P 500 index dropped 54.85 points (1.51%) to 3,585.62, and the tech-heavy Nasdaq index declined 161.89 points (1.51%) to close at 10,575.62.

This marks the first time since November 2020 that the Dow has fallen below the 29,000 level. On a monthly basis, the Dow and S&P 500 indices recorded declines of 8.8% and 9.3%, respectively. The Nasdaq index plunged by a staggering 10.5%.

By sector, consumer staples, utilities, and travel stocks showed weakness. Carnival, a leading cruise stock, closed down 23.25% after releasing disappointing earnings forecasts due to rising fuel costs and inflation impacts. This was the largest drop among major New York stock market stocks that day. Competitors Royal Caribbean and Norwegian Cruise Line Holdings also fell 13.15% and 18.04%, respectively. Energy stocks such as ExxonMobil (-1.54%) and Chevron (-0.76%) were also weak due to falling oil prices.

Nike closed down 12.81% as net profits worsened significantly amid concerns over supply chain and inventory surpluses. Apple, which had fallen sharply the previous day, slipped another 3% on this day. F45 Training Holdings surged over 41% following news of an acquisition proposal from Kennedy Lewis Management.

Investors closely watched the Fed's preferred indicator, the Personal Consumption Expenditures (PCE) price index, and remarks from Fed officials on this day.

According to the U.S. Department of Commerce, the core PCE price index rose 4.9% year-over-year in August, exceeding both the previous month and market expectations. On a month-over-month basis, it increased from 0.0% to 0.6%, confirming growing inflationary pressure. The August PCE, including energy and food prices, rose 6.2% year-over-year, slightly slowing from the previous month’s 6.4%, but still well above market forecasts.

Fed Vice Chair Lael Brainard also emphasized the need to ease inflation and stated that the Fed is striving not to prematurely shift from its current restrictive monetary policy. This reaffirmed that tightening will continue for some time.

With the tightening stance gaining weight, U.S. Treasury yields rose in the New York bond market. The 10-year Treasury yield, which initially fell, climbed to around 3.82%. The 2-year yield, sensitive to monetary policy, rose to about 4.26%.

Zachary Hill, fund manager at Horizon Investments, said, “Investors are also aligning with the Fed’s prolonged tightening and sustained high interest rates,” adding, “Market volatility will continue.”

Oil prices slightly declined ahead of the Organization of the Petroleum Exporting Countries Plus (OPEC+) producers’ meeting. On the New York Mercantile Exchange, November West Texas Intermediate (WTI) crude oil prices closed at $79.49 per barrel, down $1.74 (2.14%) from the previous day.