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The S&P 500 gave up gains on Wednesday, the final day of September, after new U.S. economic data showed inflation slowed last month, sending Treasury yields lower.
The Dow Jones Industrials slid 441.13 points to 50.908.79
The much-broader index went lower 18.81 points to 7,652.03.
The NASDAQ Composite held onto gains of 63.52 points to 26,861.06.
Strong private sector data offset the light inflation data with ADP saying 90,000 jobs were added in September, much better than the 68,000 consensus estimate from economists.
Micron led tech shares higher in early trading, up 1% before its results after the bell. Nvidia and Alphabet were also in the green.
Wednesday marks the last day of September and the third quarter. Market performance has been mixed in both timeframes.
The personal consumption expenditures price index for August increased at a 3.4% annual rate, down from 3.7% the month prior.
Economists surveyed by Dow Jones had been looking for inflation to remain steady at 3.7%.
Even more encouraging was core PCE, excluding food and energy, which rose 3% year on year, down from 3.3% the month before, also lower than economists had forecast.
Odds of a Fed rate hike eased on Wednesday. Figures released Wednesday show traders are pricing in a 35% chance of a quarter-point rate hike next month. That’s down 51% a day ago. Traders are still expecting another hike in December despite the light inflation data Wednesday.
The 10-year Treasury yield retreated from its highest since 2007 following the slowing inflation data and was last at 5.23%. The 30-year
Treasury yield fell from levels not seen since June 2002.
Higher yields have pressured stocks all month with the S&P 500 in the red for September by 0.2% through Tuesday.
Prices for the 10-year Treasury lost some ground, putting yields up to 5.29% from Tuesday’s 5.25%. Treasury prices and yields move in opposite directions.
Oil prices gained $1.16 to $90.54 U.S. a barrel.
Gold prices jumped $3.60 to $4,183.30 U.S. an ounce.
