U.S. stocks closed mixed on Wednesday, September 30, the final trading day of the third quarter, as a cooler than expected inflation report was overshadowed by a stronger ADP jobs number and a surge in long-term Treasury yields to their highest level since 2002. The S&P 500 and Dow Jones Industrial Average slipped while the Nasdaq Composite eked out a gain, capping a weak month for the broader market even as large technology shares continued to outperform. Corporate news added further volatility, with Boeing, MongoDB and Moderna among the day's biggest individual movers.

Indices Close Mixed to Wrap Up a Weak September

The S&P 500 fell 0.25% to close at 7,651.54, while the Dow Jones Industrial Average dropped 443.87 points, or 0.86%, to 50,906.05, pressured by the jump in bond yields. The Nasdaq Composite bucked the trend, adding 0.24% to finish at 26,861.06. For the month, the S&P 500 lost 0.5% and the Dow fell 4.3%, while the Nasdaq rose 1.9%, its best relative monthly performance since the spring. Over the third quarter as a whole, the S&P 500 advanced 2% and the Nasdaq gained 2.5%, while the Dow declined 2.7%.

Cooler PCE Inflation Meets a Hotter Jobs Report

The Commerce Department's August Personal Consumption Expenditures index, the Federal Reserve's preferred inflation gauge, rose 3.4% from a year earlier, below the 3.7% consensus estimate, with core PCE easing to 3.0% against a 3.3% forecast. The relief was tempered by a surprisingly strong ADP National Employment Report, which showed private employers added 90,000 jobs in September, far above the 68,000 forecast and up sharply from a downwardly revised 36,000 in August. Wage growth for job stayers held near 4.7% year over year, a sign the labor market was not cooling as quickly as many had hoped.

Long-Term Treasury Yields Hit Highest Level Since 2002

The strong ADP data pushed Treasury yields higher across the curve, with the 30-year bond climbing to around 5.63%, its highest level since 2002, as traders weighed resilient hiring against the prospect of a less aggressive pace of interest rate cuts. The move weighed more heavily on rate-sensitive, value-oriented sectors within the Dow than on the growth-heavy Nasdaq, which continued to draw demand for large-capitalization technology names. Investors are now looking ahead to the official September employment report for further confirmation of the direction of the labor market.

Boeing, MongoDB and Moderna Lead Individual Stock Moves

Boeing shares rose roughly 3% after the U.S. Navy awarded the company a contract worth more than $20 billion to develop the F/A-XX next-generation carrier-based fighter, beating Northrop Grumman for Boeing's second major sixth-generation fighter win in two years. MongoDB jumped 6% to $358.90 at its investor day, days after chief executive Chirantan Desai resigned to join Meta Platforms, with former CEO Dev Ittycheria named interim leader. Moderna slid as much as 7% after Citi downgraded the stock to Sell from Neutral on valuation concerns following its recent rally on cancer vaccine trial data. Robinhood rose 2.3% after unveiling 24-hour weekend trading for U.S. stocks, while WTI crude held near $90 a barrel and gold eased to around $4,170 an ounce.

Daily market analysis by BCM Markets.