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Markets Post Worst Trading Day in Months

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Markets closed Tuesday at or near session lows today — another rough one for equities trading. The Dow broke a four-day winning streak to fall -570 points, -1.63% on the day — and now in the negative for Q3. The S&P 500 lost 90 points, or -2.04%, for its worst day since May, while the Nasdaq posted its worst single day since May: -2.83%, or -423 points. The Small-cap Russell 2000 was not spared; it was down -2.25% today, as well.

It’s been a rather reliably bad September for the markets — historically the worst single month of the year. Currently, we see supply constraint issues meeting with an unsure near-term future with the budget of the federal government, along with a Fed body looking closer to tightening monetary policy than it had as recently as last week. The 10-year bond yield rose to 1.54% and stayed there today.

All 11 sectors on the S&P 500 fell on the day, led by recently high-flying tech, which dropped -3%. Communications Services and Consumer Discretionary were also down -2%. Bitcoin and Ethernet lost -3.5% and -3.0% on the day, respectively. One of the only bright spots was Natural Gas, which climbed +3% on higher prices due to those supply chain issues, combined with the onset of cooler weather months in much of the U.S.

The September Consumer Confidence Index came in slightly below expectations today: 109.3 was the headline, following 115.2 the previous month and expectations for 115.3 in the current month. This survey concerns consumer expectations, not including the very present. Currently, we see confidence waning a bit on inflation weighing heavier on consumer sentiment — not only because our dollars won’t go as far, but because it spells the end to massive liquidity from the Fed many consumers have treated as their life blood this year.

Memory semiconductor major Micron (MU - Free Report) outperformed expectations on both top and bottom lines for fiscal Q4 after Tuesday’s closing bell: $2.42 per share versus $2.33 expected, on $8.27 billion, which surpassed the $8.21 billion Zacks consensus. However, a big pullback in fiscal Q1 estimates for both sales and earnings caused Micron to drop as low as -5% after hours. The Boise, ID-based company stock has since rebounded, but remains -2.5% in late trading.

We’ll see another appearance from Fed Chair Jay Powell tomorrow, this time at a forum for the European Central Bank (ECB). This time, though the ECB is on record as not worried about “overreacting” to inflation — which ECB President Christine Legarde said publicly today — a change in sentiment from the Chairman of the Fed may add a new wrinkle to this. Also, we expect a bounce-back in Pending Home Sales for August tomorrow morning.

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