Stocks Stall While Gold, Treasuries Rise; Oil Puts Pressure On Energy Stocks: What's Driving Markets Wednesday?

Major large-cap stock indices hovered around parity during early afternoon trading in New York, in a rather subdued trading session on Wall Street.

Traders are grappling with mixed sentiments in the wake of weaker-than-expected ADP employment data from the previous month, hinting at a potential cooling in labor market conditions. This uncertainty looms large ahead of Friday’s eagerly anticipated jobs report.

The prospect of a softer labor market could indeed fuel expectations of future interest rate cuts by the Federal Reserve, but it also raises concerns about weakening household demand, which could cast a shadow on corporate sales and earnings.

In this climate of uncertainty, investors are flocking to haven assets such as Treasuries and gold, while taking a more cautious stance on stocks.

The iShares 20+ Year Treasury Bond ETF TLT, which tracks the performance of long-dated Treasury securities, surged by 1.4%, building on Tuesday’s impressive gain of 2.5%.

On the flip side, oil prices tumbled, with West Texas Intermediate (WTI) crude slipping below the $70 per barrel mark. This marks the lowest level seen since early July 2023, as traders continue to question the effectiveness of OPEC’s production cuts and grapple with growing concerns of a global economic slowdown.

Energy stocks, as reflected by the Energy Select Sector SPDR Fund XLE, emerged as Wednesday’s notable underperformers, down by 1.8%.

Bitcoin BTC/USD flattened after crossing the $44,000 milestone, propelling its total market capitalization to an impressive $860 billion

Wednesday’s Performance of US Indices

• The SPDR S&P 500 ETF Trust SPY edged 0.1% lower to $456.18.
• The SPDR Dow Jones Industrial Average ETF DIA was steady at $362.10. 
• The Invesco QQQ Trust QQQ eased 0.1% to $386.79
• The iShares Russell 2000 ETF IWM rose 0.8% to $185.77, according to Benzinga Pro data.

Chart Of The Day: Bonds On The Launching Pad

Sector, Industry ETF Performance

Aside from the energy sector’s underperformance, other laggards were the Technology Select Sector SPDR Fund XLK and the Consumer Staples Select Sector SPDR Fund XLP, down 0.4% and 0.3%, respectively.

Major gainers were the Consumer Discretionary Select Sector SPDR Fund XLY, up 1%, and the Utilities Select Sector SPDR Fund XLU, up 0.8%.

On an industry level, airline stocks, as tracked by the U.S. Global Jets ETF JETS rose by 3.5%. Oil services, as tracked by the VanEck Oil Services ETF OIH, fell the most, down 2.8%.

Stocks In Focus

• Citigroup Inc. C rose 3.6% after the company announced a share buyback program of $500 million in Q4.
• Altria Group Inc. MO and Philip Morris International Inc. PM both experienced declines of 2.6% and 1.7%, respectively, as they were impacted by the ripple effect of British American Tobacco Industries plc‘s BTI substantial $31.5 billion devaluation of its cigarette brands, a move that had caused an 9% drop in the stock price.
• Lucid Group Inc. LCID surged over 7% after revealing plans to lower prices and offer greater customization options for its 2024 models, targeting a wider consumer base in North America.
• Campbell Soup Company CPB rose nearly 8% after the company reported better-than-predicted earnings in the fiscal Q1.
• Carnival Corp. CCL soared over 5%, amid improving sentiment in travel stocks.
• Brown Forman Inc. BF fell nearly 9% on disappointing quarterly results.
• SentinelOne Inc. S is up more than 16% following positive quarterly earnings.
• Robinhood Inc. HOOD is up 9%, on track for the fourth consecutive session of gains, fueled by the recent broad-based crypto rally.
• MongoDB Inc. MDB fell 7% despite strong results in Q3, and several analysts raising price target for the stock.

Read now: 2024’s Potential Stock Surprises: Goldman Sachs Unveils S&P 500 Laggards For Major Gains

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