Stock Market Today: S&P 500 Concludes Q3 with Significant Gains on Hopes for Additional Rate Cuts

The S&P 500 closed higher on Monday, bringing the third quarter to a close with significant gains, thanks to the expectation of potential interest rate cuts as Federal Reserve officials indicate a likelihood of further easing in monetary policy.

By 4:00 p.m. ET, the S&P 500 index was up 0.3%, while the Dow Jones Industrial Average saw a rise of 17 points, or 0.04%. The NASDAQ Composite also climbed by 0.4%. The S&P 500 achieved a 5% increase for the quarter, recovering from a significant selloff on August 5 that was driven by recession fears, which have since eased following a series of positive economic indicators.

Powell Indicates Flexibility on Rate Cuts

Federal Reserve Chairman Jerome Powell stated that monetary policy does not follow a predetermined path but suggested that further rate cuts could occur if the economy continues to progress as anticipated. He mentioned, "Looking forward, if the economy evolves broadly as expected, policy will move over time toward a more neutral stance. But we are not on any preset course," in remarks prepared for the National Association for Business Economics.

These comments came shortly after Atlanta Fed President Raphael Bostic indicated his willingness to support another 50 basis point rate cut if unexpected weakness arises in the labor market. Key labor market data, including jobless claims and private payroll reports, are expected to be in focus this week, leading up to the release of the October nonfarm payrolls report on Friday, with economists predicting an addition of 144,000 jobs to the U.S. economy.

Corporate Developments

In the corporate sector, Stellantis experienced a significant setback, with its stock falling over 12% after the automaker, known for brands like Chrysler, Dodge, and Jeep, reduced its annual forecasts. The company cited worsening industry conditions, higher expenses related to its U.S. operations, and competition in the electric vehicle market as reasons for the revised outlook.

Contrastingly, AT&T’s stock rose 0.5% following the announcement of its plan to sell a 70% stake in satellite TV provider DirecTV to private equity firm TPG for $7.6 billion, signifying its exit from a declining market.

CVS Health saw a 1.5% increase in stock price after reports surfaced that Glenview Capital, a major shareholder, plans to meet with CVS leadership to discuss strategies for improving the company’s performance.

Insurance brokerage Marsh & McLennan announced an agreement to purchase McGriff Insurance Services for $7.75 billion, as the industry anticipates an increase in spending on policies due to a more favorable economic outlook.

Nio Inc Class A ADR closed 2% higher after revealing that its Nio China business would receive a 13.3 billion yuan investment from Nio, along with approximately 3.3 billion yuan from strategic investors.

Oil Prices Rise Amid Middle East Tensions

Oil prices increased on Monday amid concerns of a potential escalation in the Middle East conflict, following reports that Israel was preparing for a limited ground invasion of Lebanon in response to its ongoing conflict with Iranian-backed Hezbollah.

Both oil contracts had declined the previous week due to rising demand concerns after Chinese fiscal stimulus failed to boost market confidence, despite China being the world’s second-largest economy and a top oil importer.