US stocks finished the first trading day of October with modest gains, but the closing changes hide a more active session. All four major large-cap indices traded on both sides of unchanged, giving buyers and sellers opportunities to make a play.
Treasury yields moved lower across the curve, offering a more supportive backdrop for equities. Nevertheless, the Dow and Nasdaq Composite finished barely higher, while the S&P 500 and Nasdaq 100 also closed below their session highs. Buyers recovered from the lows. They did not run away with the upside.
The closing numbers
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Dow Industrial Average: Up 21.01 points (+0.04%) to 50,932.10.
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S&P 500: Up 14.92 points (+0.19%) to 7,666.46.
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Nasdaq Composite: Up 10.53 points (+0.04%) to 26,871.60.
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Russell 2000: Up 9.76 points (+0.35%) to 2,806.63.
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Nasdaq 100: Up 93.06 points (+0.31%) to 30,501.56.
The Russell 2000 led the percentage gains, followed by the Nasdaq 100. The Dow and Nasdaq Composite lagged.
How far up—and down—did the indices trade?
The following changes measure each session extreme against the previous close:
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Dow Industrial Average: At its low of 50,546.54, the index was down 364.55 points (−0.72%). At its high of 51,179.78, it was up 268.69 points (+0.53%). The total range was 633.24 points.
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S&P 500: At its low of 7,615.74, the index was down 35.80 points (−0.47%). At its high of 7,684.48, it was up 32.94 points (+0.43%). The total range was 68.74 points.
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Nasdaq Composite: At its low of 26,733.89, the index was down 127.18 points (−0.47%). At its high of 27,014.47, it was up 153.40 points (+0.57%). The total range was 280.58 points.
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Nasdaq 100: At its low of 30,274.65, the index was down 133.85 points (−0.44%). At its high of 30,616.24, it was up 207.74 points (+0.68%). The total range was 341.59 points.
The Nasdaq Composite finished 142.87 points below its high, while the Dow closed 247.68 points below its best level. That gives a better sense of the two-way trading than the small closing gains alone.
Treasury yields retreat
The US yields are closing the day lower with the shorter end retreating the most. The market is pricing in a 30% chance of a hike in October, down from 64% a few days ago. With the 2 year at 4.78%, it is still comfortably above the 3.75% to 4.00% current target range.
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2-year yield: 4.781%, down 10.60 basis points.
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5-year yield: 5.017%, down 8.73 basis points.
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10-year yield: 5.2343%, down 5.85 basis points.
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30-year yield: 5.561%, down 3.56 basis points.
Lower yields can ease financing pressure and support equity valuations, but today’s modest stock gains show that bond-market relief did not translate into aggressive buying across the major indices.
Economic data and the Fed remain in focus
Initial jobless claims fell to 197,000, below the 200,000 forecast. September’s ISM manufacturing index eased to 54.5 from 54.6, while higher input prices kept inflation concerns alive. Fed Vice Chair Philip Jefferson subsequently suggested patience before another rate increase. Friday’s employment report is the next major test.
The lesson for traders
A nearly unchanged close does not mean a quiet market.
Today’s session gave traders meaningful moves in both directions. Buyers had their shot at the highs, but could not hold all the gains. Sellers had their shot at the lows, but could not keep the indices negative into the close.
For the next session, today’s highs and lows provide initial reference points. Getting above—and staying above—the highs would give buyers more control. Moving below—and staying below—the lows would increase the bearish bias. Until then, traders need to respect the possibility of more two-way price action.
