Summarize in up to four sentences.: Stocks slide as worries about inflation revive: Stock market news today

Karen Friar and Josh Schafer
Wed, September 6, 2023 at 4:05 p.m. EDT·1 min read
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Stocks fell on Wall Street on Wednesday, as another losing day in a short week came and lingering concerns about inflation spurred doubts the Federal Reserve will decide to cut interest rates anytime soon.

The S&P 500 (^GSPC) finished down about 0.7%, while the Dow Jones Industrial Average (^DJI) dropped around 0.6%. The tech-heavy Nasdaq Composite (^IXIC) plummeted over 1%.

WTI crude oil (CL=F) is trading around its highest level since November, and up another 1% Wednesday, after Saudi Arabia and Russia stuck with output cuts. That reignited worries about "sticky" inflation and weighed on stocks, helping push all three major US gauges to close lower on Tuesday.

With the Fed's Sept. 20 meeting on the horizon, investors are debating whether those price pressures will convince policymakers to keep rates higher for longer.

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At the same time, downbeat data out of Europe and China are driving worries about crumbling demand, which could undermine the resilience that the US economy has shown so far. A surprisingly sharp fall in German industrial orders in July fueled speculation of a risk of stagflation.

Given that, eyes were on fresh PMI data on the US services sector in August, closely watched for signs of inflation. The ISM reading came in at 54.5, compared with 52.5 expected, for the eighth month of higher activity in a row.

Earlier, the US trade deficit widened less than expected in July, as exports rose 1.6% after three months of declines, official figures showed. The Federal Reserve's Beige Book was also released Wednesday, with evidence from respondents showing inflation and wage growth may be slowing.

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12 hours ago
Josh Schafer
Stocks closer lower after resilient economic data
All three major averages closed in the red on Wednesday as economic data showed activity in the services sector hit a six-month high in August, spawning fear the economy may be running too hot for inflation to continue on its downward trajectory.

The S&P 500 (^GSPC) fell about 0.7%, while the Dow Jones Industrial Average (^DJI) slipped nearly 0.6%, and the tech-heavy Nasdaq Composite (^IXIC) led losses, dragging by more than 1%. Meanwhile, WTI crude oil (CL=F) closed above $87 a barrel and now has seen price increases for nine-straight days.

13 hours ago
Josh Schafer
Fed Beige Book shows slowdown may be coming
A look at the Federal Reserve's 12 bank districts showed the resilient US economy is showing some cracks.

Yahoo Finance's Jennifer Schonberger reports:

The Fed’s Beige Book revealed Wednesday that businesses in several districts struggled during August to pass on costs to consumers, as costs of making goods are growing faster than prices.

The Beige Book compiles anecdotal evidence across the Fed’s 12 bank districts. Central bank officials will use this information in two weeks when they meet for their policy meeting.

In July Fed officials raised interest rates for the 11th time since March 2022 in what may be the first of two rate hikes that officials have penciled in for the remainder of the year.

The Fed will hold its next policy meeting on Sept. 19-20, when officials are expected to take a breather and hold rates steady in the range of 5.25%-5.5% to make sure inflation data continues to show cooling.

Most districts reported price growth slowed overall, decelerating faster specifically in manufacturing and consumer-goods sectors.

Districts across the country saw subdued job growth, as companies continued to deal with a shortage of skilled workers for open jobs and the pool of job applicants remained limited.

That trend has kept power in the hands of workers and helped boost wages.

Though, many contacts suggested "the second half of the year will be different" when it comes to wage growth. Businesses across the country reiterated their expectations that wage growth will slow broadly in the near term.

14 hours ago
Josh Schafer
AMC shares crash on stock offering
AMC (AMC) plans to issues more stock and investors in the former meme-stock trade aren't reacting positively to the news.

Yahoo Finance's Ines Ferre reports:

AMC Entertainment stock tanked more than 30% on Wednesday after the cinema chain announced plans to sell up to 40 million shares.

The company said it plans to use the proceeds “to bolster liquidity, to repay, refinance, redeem or repurchase its existing indebtedness,” and general corporate purposes.

Investors anticipated a share sale following last month's court approved settlement which allowed the company to convert AMC’s special preferred shares, known as (APE) units, into AMC common stock.

"AMC should now be able to raise additional equity capital," AMC CEO Adam Aron wrote in a letter to investors following the court approval. Shares underwent a 10 for 1 reverse split in August prior to the conversion.

AMC, also known as an original flagship meme stock, has played into vocal support from retail investors since 2021. The company was challenged during the pandemic lockdowns, and has tried to reinvent itself as more than a traditional theater chain in an era of streaming at home videos.

15 hours ago
Josh Schafer
'Higher stock prices are path of least resistance,' BMO says
Stocks have slumped to start a seasonally bad month for the S&P 5000. But BMO Capital Markets Chief Investment Strategist thinks the most likely next move in markets is to the upside.

"Yes, there is still a fair amount of uncertainty to be resolved in the coming months that will likely lead to shorter periods of heightened volatility, but we continue to believe that higher US stock prices through year-end is the path of least resistance with our bull case scenario (5,050) becoming increasingly more likely," Belski wrote on Tuesday night.

Belski points to several key tailwinds. For one, while September has historically been bad for stocks, when the market is up more than 15% through August, the rest of the year usually sees gains too. As Yahoo Finance's Myles Udland noted earlier this week in the Morning Brief, earnings are being revised over the first two months of the quarter for the first time since the third quarter of 2021.

Additionally, Belski doesn't see high yields being a longterm headwind for stocks and notes that recent resilient economic data shows the US economy "can and should avoid disaster."

Belski added that despite concerns, "US stock market performance has been impressive with the S&P 500 on track for a solid double-digit calendar year gain. From our perspective, this has been a result of the better-than-anticipated fundamental underpinnings of US stocks, which is something we believe continues to get largely ignored by investors."

16 hours ago
Josh Schafer
Stocks lower after economic data
All three of the major averages are tracking for their worst day in 2 weeks as economic data that showed continued resilience in the services sector sent stocks lower during morning trade.

The S&P 500 (^GSPC) fell about 1%, while the Dow Jones Industrial Average (^DJI) slipped 0.7%, and the tech-heavy Nasdaq Composite (^IXIC) led losses, dragging by 1.4%.

16 hours ago
Josh Schafer
August ISM PMI's show more evidence of resilience, economist says
The US services sector grew at a faster than expected pace in the month of August, per new data from the Institute for Supply Management.

The services PMI came in at 54.5%, above Wall Street estimates for 52.5 and the prior month's 52.7 reading. The uptick marked the eighth-straight month the services reading has come in above 50, which is considered a sign of economic expansion. It was also the highest reading since February.

"This series had been showing steady deceleration from the explosion of reopening activity in 2021 through the first half of 2023," Jefferies US economist Thomas Simons wrote in a note on Wednesday. "The index dipped below 50 in December 2022, and also recently got close to contraction territory at 50.3 in May. The improvement since May shows some encouraging signs of a bottom, and evidence of a resilient economy."

The Nasdaq Composite (^IXIC) tracked lower after the announcement and is now down more than 1% on the day.

17 hours ago
Alexandra Canal
Roku shares see boost from guidance raise, cost-cutting efforts
Roku stock (ROKU) soared as much as 14% in early trading on Wednesday after the company revealed a slew of cost-cutting measures including layoffs in an effort to bring down operating expenses.

In a regulatory filing released Wednesday morning, Roku said it would be eliminating 10% of its workforce, or 300 jobs, in addition to slowing down its pace of hiring. This marks Roku's third round of layoffs in less than a year after it cut 200 jobs in March 2023 and another 200 in November 2022.

Excluding charges related to items such as severance and the removal of select content from its streaming platform, Roku now expects third-quarter net revenue in the range of $835 million to $875 million, with adjusted EBITDA in the range of negative $40 million to negative $20 million. This is ahead of its previous Q3 forecast for revenue of roughly $815 million and adjusted EBITDA of negative $50 million.

Analysts weighed in on the surprise guidance raise, with JPMorgan reiterating its Overweight rating on the stock.

"We (& investors) initially thought Roku’s 3Q revenue guide was conservative, but a 7% increase (at the high-end) two months into the quarter was certainly not expected given the ongoing Hollywood strikes," JPMorgan analyst Cory Carpenter wrote in a note on Wednesday.

Read more here.

19 hours ago
Josh Schafer
Stocks open lower
Stocks were in the red on Wednesday as oil prices hovered near highs not seen since November 2022.

The S&P 500 (^GSPC), the Dow Jones Industrial Average (^DJI), and the tech-heavy Nasdaq Composite (^IXIC) all slipped about 0.3% at the open. Meanwhile, WTI crude oil (CL=F) floated near $87 a barrel, its highest close since November 2022.

19 hours ago
Jenny Mccall
Roku, Photronics, Enbridge: Stocks trending in premarket trading
Here are some of the stocks leading Yahoo Finance’s trending tickers page in premarket trading on Wednesday.

Enbridge (ENB): Shares in the Canadian pipeline operator Enbridge fell by as much as 7% after it agreed to buy three utilities from Dominion Energy Inc. in a $9.4 billion deal to create North America’s largest natural gas provider. Dominion's stock also fell.

Roku (ROKU): Roku’s shares surged by 12% after announcing it would be reducing 10% of its workforce in a restructuring aimed at trimming the streaming platform’s rising expenses.

Photronics (PLAB): The semiconductor equipment supplier Photronics' stock plummeted after it missed Wall Street’s targets for its fiscal third quarter.

GitLab (GTLB): The software development platform outperformed analyst estimates in its quarterly earnings, and its shares jumped more than 5% in the premarket trade.

21 hours ago
Karen Friar
Stock futures fall, setting up for another losing day
Wall Street stocks on Wednesday were poised to add to the previous session's losses, as downbeat German data and rising oil prices reignited concerns about persistent inflation.

Futures on the Dow Jones Industrial Average (^DJI) slipped 0.13% or 46 points, while those on the S&P 500 (^GSPC) dropped 0.19%. Nasdaq 100 futures slid 0.28%.