Stocks gave back early gains after a weaker-than-expected update on U.S. manufacturing and a Supreme Court ruling with major implications for the 2024 election.
The Dow fell 16 points, or less than 0.1%. The S&P 500 fell 0.1%. The Nasdaq Composite rose 0.1%.
The Institute for Supply Management’s Purchasing Managers Index fell to 48.5 in June, which was below economists’ expectations at 49.1. A value below 50 indicates shrinkage.
Tom Essaye of Sevens Report Research told us Barrons the report was more of a “Goldilocks” number, meaning it was “just right.” He cited rising new orders, a leading indicator, and price declines indicating easing inflationary pressures.
“In the short term, this number reinforces expectations for a rate cut in September (which is positive), but at the same time, and longer term, it keeps alive concerns that the economy is weaker than people think and we continue to think this is the biggest risk to the rally as we enter the second half of 2024,” Essaye said.
The yield on the 10-year Treasury note rose after surpassing 4.4%, climbing to 4.481%. Andrew Brenner, head of global fixed income at NatAlliance Securities, wrote that the increased odds of a new Donald Trump presidency have pushed long-term bond yields higher.
“This is a classic bond market reset due to the debate and increased likelihood of a Trump victory,” Brenner wrote. “We see the curve steepening, but as positions start to coalesce it could slow this down.”
The Supreme Court ruled Monday that presidents have immunity from prosecution when they perform official acts. That could hamper the federal case against Trump related to his efforts to overturn the 2020 election.
