Stocks Pare Gains Amid Weak Manufacturing Data and Fed Speculation: Markets Wrap Jobless Claims Show Gradual Cooling, Manufacturing Contracts at Fastest Pace This Year

Stocks pared gains as traders assessed mixed economic reports for hints on the Federal Reserve’s next moves. With Jerome Powell’s Jackson Hole speech on the horizon, data revealed that jobless claims indicate a slowly cooling labor market, while US manufacturing activity contracted at its fastest pace this year, driven by declines in production, orders, and factory employment.

Equities retreated from session highs, with the S&P 500 just under 1% away from its all-time peak. Treasury yields and the US dollar edged higher. Fed officials have shifted their focus to the labor market as inflation eases from its pandemic highs. Kansas City Fed President Jeffrey Schmid emphasized the need for more data before supporting rate cuts, while Boston Fed President Susan Collins suggested a “gradual, methodical pace” for future cuts. The S&P 500 hovered around 5,630.

Corporate highlights included Peloton Interactive Inc. rallying on better-than-expected profits, signaling progress in its turnaround, while Snowflake Inc. plunged after its sales outlook failed to impress investors. Treasury 10-year yields advanced two basis points to 3.83%.

Corporate Highlights:

  • Urban Outfitters Inc. (URBN) reported quarterly sales growth that missed Wall Street expectations.
  • Carlyle Group Inc. (CG) acquired Advance Auto Parts Inc.’s Worldpac unit for $1.5 billion, marking its first major industrial investment in over two years.
  • Zoom Video Communications Inc. (ZM) exceeded sales forecasts for the current quarter, showing gains with business customers.
  • Starboard Value LP urged Autodesk Inc. to evaluate its CEO’s leadership following recent accounting issues.
  • Toronto-Dominion Bank (TD) set aside $2.6 billion to cover expected fines for money-laundering control failures, leading to its first quarterly loss in decades. The bank also sold part of its stake in Charles Schwab Corp. to fund the provision.

 

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Stocks Pare Gains Amid Weak Manufacturing Data and Fed Speculation: Markets Wrap Jobless Claims Show Gradual Cooling, Manufacturing Contracts at Fastest Pace This Year

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