S&P 500, Dow End Lower As Investors Shrug Off Cooler-Than-Expected Inflation Data — MGM, SPCX, AAPL, TSM In Focus

• The S&P 500 ended Wednesday 0.3% lower, the Nasdaq 100 rose 0.2%, and the Dow Jones Industrial Average fell 0.9%.
• The Federal Trade Commission is scrutinizing OpenAI, Anthropic PBC and other AI labs. 
• The personal consumption expenditures price index for August increased at a 3.4% annual rate.

The S&P 500 and Dow Jones ended Wednesday lower, with the Dow recording its worst month since March this year as investors shrugged off cooler PCE data amid elevated Treasury yields. 

The S&P 500 ended Wednesday 0.3% lower, the Nasdaq 100 rose 0.2%, and the Dow Jones Industrial Average fell 0.9%. The Russell 2000, which tracks small-cap stocks, fell 0.7%.

The SPDR S&P 500 ETF (SPY) was down 0.1%, the SPDR Dow Jones Industrial Average ETF (DIA) slipped 0.8%, and the Nasdaq-100 tracking Invesco QQQ Trust (QQQ) added 0.4%. 

Meanwhile, the VanEck Semiconductor ETF (SMH) and the iShares Semiconductor ETF (SOXX) rose about 0.5%, tracking gains in Nvidia (NVDA), Micron Tech (MU) and Advanced Micro Devices (AMD). The broader Vanguard Information Technology ETF (VGT) added about 0.9%.

The Nasdaq 100 ended the month about 3.2% higher, owing to strength in chipmaker stocks. AMD, Intel (INTC), Arm Holdings (ARM), Marvell Technologies (MRVL).

Retail sentiment on Stocktwits for QQQ, SPY, and DIA was ‘bullish’ with ‘high’ message volumes.

US Market Drivers

The personal consumption expenditures price index rose 3.4% annually in August, down from an initial 3.7% the prior month, which was later revised down to 3.4%. Meanwhile, core PCE, which strips out volatile food and energy costs, slowed to 3% annually from 3.3% previously, coming in below market projections.

Fixed-income markets showed little reaction to the readout, but remained at elevated levels. The benchmark 10-year Treasury yield ticked up 1 basis point to 5.27%, remaining near recent multi-decade peaks. The 30-year Treasury yield climbed 3 basis points to 5.62%.

However, the cooler reading has pushed traders to wind down some bets that the Federal Reserve would hike rates again in October. According to the CME FedWatch tool, bets for a rate hike in October fell to 37% on Wednesday from 51%. 

“This is good news for investors worried about the recent surge in bond yields, and it bolsters the case for not hiking in October,” David Russell at TradeStation told Bloomberg. 

Key Trending Stocks

MGM Resorts International’s Chief Executive Bill Hornbuckle has opened the door to a potential takeover of media and holding company People Inc., marking an unexpected turn in corporate dealmaking after Barry Diller’s firm scrapped its own attempt to acquire the casino giant. 

SpaceXAI, the artificial-intelligence arm of Elon Musk’s SpaceX (SPCX), is reportedly reviewing a rewrite of how it sells the Grok chatbot and the X social network. 

The Federal Trade Commission (FTC) is launching a broad inquiry into artificial intelligence developers, including OpenAI and Anthropic PBC, to evaluate potential consumer risks and assess product safety standards. 

Apple Inc. (AAPL) is set to sell about 6 million units of the iPhone Duo this year, Counterpoint Research said 

Taiwan Semiconductor Manufacturing Co. (TSM) is reportedly evaluating a potential investment in Texas to expand its chip production footprint in the U.S. 

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