U.S. stocks lost ground during the first trading session in June after stark comments from JPMorgan (JPM) chief Jamie Dimon, who warned of a “hurricane” rushing down on the U.S. economy.
The S&P 500 fell 0.7%, the Dow lost 0.5% and the Nasdaq fell 0.7% on Wednesday.
After the recovery to the start of the trading session, the main averages fell after solid data on the US manufacturing sector, which was briefly followed by Dimon’s comments at the investment conference.
Data from the Institute for Supply Management showed that the US manufacturing sector grew faster than expected in May, another signal that fears of a looming US economy may be exaggerated.
The April BLS vacancy report also showed a decline in the number of vacancies, a data point that the Federal Reserve is likely to view positively as it works to cool the labor market.
The biggest corporate headline of the day crossed around 3:30 p.m. ET, when Meta Platforms (FB) announced that Sheryl Sandberg COO would resign from its position in the company. Sandberg, who joined Facebook in 2008, will remain on the company’s board of directors even after leaving the company in the autumn.
Shares of Meta Platforms ended Wednesday’s trading session down 2.5%.
Positive earnings reports from Salesforce (CRM) late Tuesday boosted investor sentiment early Wednesday after the software company raised its earnings forecast, saying it saw no significant impact on operations due to macroeconomic uncertainty.
The outlook contrasted with some unfavorable quarterly results from corporate counterparts, which signaled future struggles with rising costs and supply chain imbalances.
“We just don’t see the material impact on the wider economic world you all find yourself in,” Salesforce CEO Marc Benioff said in a profit report. Salesforce shares rose 9.8% during Wednesday’s session.
Despite a month of sharp fluctuations in stock markets, the S&P 500 leaked a small gain of less than 1% – even after seven consecutive weeks of losses that briefly dragged the index into the bear market. The Dow Jones Industrial Average also rose slightly in May, while the Nasdaq Composite Index deepened losses for the month due to the continuing rotation of technology stocks.
In the last decade, June has returned an average of 1.4%, making it the fourth best month of the year, according to LPL Financial. For the past 20 years, however, the month has been weak, with only September being worse for equities.
“June has something for everyone because it is undoubtedly a very weak month in history, but it has been strong over the last decade,” said LPL chief financial strategist Ryan Detrick. “Nevertheless, after the big jump at the end of May, we would not be at all surprised if this recent force continued in a potential summer rally.”
Bespoke Investment Group pointed out in a statement on Tuesday that the summer months have historically seen weaker stock market returns compared to the winter and early spring. According to the company, the Dow Jones Industrial Average averaged 0.47% in June over the last century, but it was a “suitable coin” for positive returns during the month, mining only 52% of cases.
4:10 PM ET: Wall Street ends the first day of June below
Here is where the major indices traded at the end of Wednesday’s session:
S&P 500 (^ GSPC): -39.02 (-0.75%) to 4,101.23
Dow (^ DJI): -176.89 (-0.54%) to 32 813.23
Nasdaq (^ IXIC): -86.93 (-0.72%) to 11,994.46
raw (CL = F): + $ 0.30 (+ 0.26%) to $ 114.97
gold (GC = F): +1.90 $ (+0.10%) to $ 1,850.30 an ounce
10-year-old treasury (^ TNX): +8 bps, yield 2.931%
10:46 ET: Jamie Dimon says a “hurricane” is coming for the US economy
JPMorgan (JPM) CEO Jamie Dimon is upset at his comments at an investor conference on Wednesday.
At the Bernstein Conference of Strategic Decisions, Dimon said the US economy was facing a “hurricane” as the Federal Reserve continued to process interest rates. Dimon said he used to refer to the upcoming challenges facing the economy as “storm clouds.”
“It’s a little sunny right now, things are fine,” Dimon told S&P Capital IQ at the conference. “Everyone thinks the Fed can handle it. The hurricane is right down there on the road, approaching us. We just don’t know if it’s small or Superstorm Sandy … or Andrew or anything. And you have to recover.”
Dimon added that he thinks the banking industry is in great shape, as are consumers who have savings of over $ 2 trillion.
“There are plenty of jobs, wages are rising, consumers are spending,” Dimon said. “[The] people on lower incomes, not as much as before, but everyone else seems to have savings of $ 2 trillion more … I don’t think it will stop … spend [in] 6 or 9 months. And those are clear clouds out there for me. “
—Myles Abroad, Chief Market Editor
10:20 ET: Manufacturing remains resilient in May
Two May data on the US manufacturing sector showed continued growth due to investors’ fears of an impending economic slowdown.
Manufacturing PMI Institute for Supply Management reached 56.1 in May, up from 55.4 in April and 24 months in a row. S&P Global’s US manufacturing PMI reached 57 in May, down from 59.2 in April.
For both messages, any value above 50 means expansion in the sector, while values below 50 indicate contraction.
However, the data was not entirely sunny, the ISM employment index showed an unexpected decline last month. In addition, the S&P report showed that business confidence had fallen to its lowest level since October 2020.
“The strong expansion in production in May is expected to help increase GDP during the second quarter, with output growth well above the average over the past decade,” said Chris Williamson, chief business economist, S&P Global Market Intelligence. “However, growth has slowed as manufacturers report persistent supply chain delays and labor shortages, as well as slower demand growth.”
Commenting on the latest ISM report, Tim Fiore, chairman of ISM’s Manufacturing Business Survey Committee, said: “The US manufacturing sector remains in a demand-driven and limited supply chain environment. workforce at all levels of the supply chain. “
—Myles Abroad, Chief Market Editor
10:07 AM ET: Job supply declines in April
The latest JOLTS report – or Job Openings and Labor Turnover Survey – showed that 11.4 million jobs were opened on the last working day in April, down from 11.86 million the previous month. Economists expected the report to show that 11.35 million jobs were opened at the end of April.
According to the BLS, the largest declines were in the health and social care, retail and food industries, where they all opened by more than 100,000 from March to April.
Economists are closely monitoring the labor market for signs of a potential cooling, with Fed Chairman Jay Powell telling reporters last month that the number of job vacancies relative to unemployed workers shows an “imbalance” in the labor market.
Wednesday’s data suggests a potential step towards rebalancing this market.
—Myles Abroad, Chief Market Editor
9:33 AM ET: Wall Street launches June after closing unstable month gains
Here is where the major indices traded at the beginning of Wednesday’s session:
S&P 500 (^ GSPC): +24.02 (+ 0.58%) at 4,156.17
Dow (^ DJI): +239.63 (+ 0.73%) at 33 229.75
Nasdaq (^ IXIC): +93.71 (+ 0.78%) at 12,175.10
raw (CL = F): +2.02 USD (+ 1.76%) to 116.69 USD per barrel
gold (GC = F): $ +1.00 (+ 0.05%) to $ 1,849.40 an ounce
10-year-old treasury (^ TNX): -0.2 bps, yield 2.8420%
7:22 AM ET: Futures are fighting for direction as investors prepare for June trading
Here were the main movements at the start of trading on Wednesday after Wall Street closed the volatile month:
futures S&P 500 (EN = F): +6.25 (+0.15%) at 4,137.50
Dow futures (YM = F): +132.00 (+ 0.40%) at 33 103.00
Nasdaq futures (NQ = F): -1.25 (-0.01%) to 12,645.25
raw (CL = F): +1.38 $ (+ 1.20%) to $ 116.05
gold (GC = F): -14.70 USD (-0.80%) to 1 833.70 USD per ounce
10-year-old treasury (^ TNX): +10.1 bps, yield 2.8440%
Alexandra Semenova is a Yahoo Finance reporter. Follow her on Twitter @alexandraandnyc
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