US stocks lost ground in June’s first trading session after tough comments from JPMorgan ( JPM ) chief Jamie Dimon, who warned of a “hurricane” hitting the US economy.
The S&P 500 fell 0.7%, the Dow lost 0.5% and the Nasdaq fell 0.7% on Wednesday.
After rallying to start the trading session, the major averages fell after strong readings on the US manufacturing sector, which were soon followed by Dimon’s comments at an investment conference.
Data from the Institute for Supply Management showed that the US manufacturing sector grew faster than expected in May, another sign that fears of an impending downturn in the US economy may be exaggerated
JP Morgan CEO Jamie Dimon listens as he is introduced at the Boston College Chief Executives Club luncheon in Boston, Massachusetts, U.S., November 23, 2021. REUTERS/Brian Snyder
The BLS’s April job openings report also showed a decline in the number of job openings, a figure that the Federal Reserve will likely view positively as it works to cool the labor market.
The biggest corporate headline of the day crossed around 3:30 pm ET, when Meta Platforms ( FB ) announced that COO Sheryl Sandberg would be leaving her position at the company. Sandberg, who joined Facebook in 2008, will remain on the company’s board after leaving the company in the fall.
Shares of Meta Platforms ended the trading session on Wednesday down 2.5%.
An upbeat earnings report from Salesforce ( CRM ) late Tuesday provided a boost to investor sentiment early Wednesday after the software company raised its profit forecast and said it did not see a significant impact on operations due to macroeconomic uncertainty.
The outlook contrasted with some unfavorable quarterly results from business peers that indicated struggles with rising costs and supply chain imbalances ahead.
“We’re not seeing a material impact on the broader economic world that you all are in,” Salesforce CEO Marc Benioff said on an earnings call. Shares of Salesforce gained 9.8% during the session on Wednesday.
Despite a month of strong moves in equity markets, the S&P 500 produced a small gain of less than 1%, even after seven straight weeks of losses briefly dragged the index into bearish territory. The Dow Jones Industrial Average also closed slightly higher in May, while the Nasdaq Composite deepened losses for the month amid a continued turnover in tech stocks.
The story continues
In the last decade, the month of June has returned an average of 1.4%, ranking it as the fourth best month of the year, according to data from LPL Financial. Over the past 20 years, however, the month has been weak, with only September worse for stocks.
“June has something for everyone as it’s certainly a very weak month historically, but the last decade has been strong,” LPL chief financial market strategist Ryan Detrick said in a note. “Still, after the big bounce at the end of May, we wouldn’t be at all surprised if this recent strength continued into a potential summer rally.”
Bespoke Investment Group noted in a note on Tuesday that the summer months have historically seen weaker stock returns relative to winter and early spring. According to company data, the Dow Jones Industrial Average has averaged 0.47% in June over the past century, but has been a “coin flip” for positive returns for the month, posting gains of just 52% of time
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4:10 PM ET: Wall Street ends first day of June lower
Here’s where the major indexes were trading at the end of Wednesday’s session:
S&P 500 (^GSPC): -39.02 (-0.75%) to 4,101.23
Dow (^DJI): -176.89 (-0.54%) up to 32,813.23
Nasdaq (^IXIC): -86.93 (-0.72%) to 11,994.46
Crude (CL=F): +$0.30 (+0.26%) to $114.97
Gold (GC=F): +$1.90 (+0.10%) to $1,850.30 per ounce
10-year treasury (^TNX): +8 bp to gain 2.931%
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10:46 am ET: Jamie Dimon says a “hurricane” is coming for the US economy
JPMorgan ( JPM ) CEO Jamie Dimon is making waves Wednesday with his comments at an investor conference.
Speaking at the Bernstein Strategic Decisions Conference, Dimon said the US economy is facing a “hurricane” as the Federal Reserve continues its process of normalizing interest rates. Dimon said he had previously referred to the looming challenges facing the economy as “storm clouds.”
“Right now, it’s a little bit sunny, things are looking good,” Dimon said on the conference call, according to a transcript from S&P Capital IQ. “Everybody thinks the Fed can handle this. This hurricane is right there on the road, coming our way. We just don’t know if it’s minor or Superstorm Sandy … or Andrew or something. to prepare.”
Dimon added that he believes the banking industry is in very good shape, as are consumers with more than $2 trillion in savings.
“Jobs are plentiful, wages are rising, consumers are spending,” Dimon said. “[The] lower income people, not as much as before, but everybody else, they seem to have $2 trillion more in savings… I don’t think that’s going to stop… the spending [in] 6 or 9 months. And so to me are the bright clouds outside.”
—Myles Udland, Senior Markets Editor
10:20 am ET: Manufacturing activity remains resilient in May
Two readings on the US manufacturing sector in May showed continued growth amid investor concerns about an impending economic slowdown.
The Supply Management Institute manufacturing PMI for May it reached 56.1, up from 55.4 in April and marking the 24th consecutive month of growth. S&P Global US manufacturing PMI it reached 57 in May, down from 59.2 in April.
For both reports, any reading above 50 indicates sector expansion, while readings below 50 indicate contraction.
However, the data was not all sunny, as the ISM employment index showed an unexpected decline last month. In addition, the S&P report showed that business confidence fell to the lowest level since October 2020.
“A solid expansion in manufacturing output in May should help drive a rise in GDP in the second quarter, with output growth well above the average seen over the past decade,” said Chris Williamson, chief economist at S&P Global Market Intelligence. “However, the pace of growth has slowed as producers report ongoing issues with supply chain delays and labor shortages, as well as slower demand growth “.
Commenting on the latest ISM report, Tim Fiore, chairman of the ISM’s Manufacturing Business Survey Committee, said: “The US manufacturing sector remains in a demand-constrained environment and the supply chain. Although the employment index contracted in May, companies improved their progress in addressing medium-term labor shortages at all levels of the supply chain.”
—Myles Udland, Senior Markets Editor
10:07 am ET: Job postings move into April
The latest JOLTS, or Survey of Job Offers and Labor Rotation, report showed 11.4 million job openings on the last business day in April, down from 11.86 million the previous month. Economists had expected this report to show 11.35 million job openings at the end of April.
According to the BLS, the largest industry declines were in health care and social work, retail trade and food services, which saw openings decline by more than 100,000 from March to April .
Economists are closely watching job openings for signs of a potential cooling in the labor market, and Fed Chairman Jay Powell told reporters last month that the number of job openings relative to unemployed workers shows an “imbalance” in the labor market.
Wednesday’s data suggests a possible move to rebalance that market.
—Myles Udland, Senior Markets Editor
9:33 am ET: Wall Street starts June with gains after closing out a volatile month
Here’s where the major indexes were trading at the start of Wednesday’s session:
S&P 500 (^GSPC): +24.02 (+0.58%) to 4,156.17
Dow (^DJI): +239.63 (+0.73%) to 33,229.75
Nasdaq (^IXIC): +93.71 (+0.78%) to 12,175.10
Crude (CL=F): +$2.02 (+1.76%) to $116.69 a barrel
Gold (GC=F): +$1.00 (+0.05%) to $1,849.40 per ounce
10-year treasury (^TNX): -0.2 bp to yield 2.8420%
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7:22 am ET: Futures struggle for direction as investors prepare for June trade
Here were the top moves in early trading Wednesday after Wall Street ended a volatile month:
S&P 500 futures (IS=F): +6.25 (+0.15%) to 4,137.50
Dow futures (YM=F): +132.00 (+0.40%) to 33,103.00
Nasdaq Futures (NQ=F): -1.25 (-0.01%) to 12,645.25
Crude (CL=F): +$1.38 (+1.20%) to $116.05
Gold (GC=F): -$14.70 (-0.80%) to $1,833.70 per ounce
10-year treasury (^TNX): +10.1 bp for a return of 2.8440%
NEW YORK, NEW YORK – MAY 25: Traders participate in a moment of silence at the start of the trading day for the victims of the Texas school shooting on the floor of the New York Stock Exchange (NYSE) on May 25, 2022 in New York. At least 21 people were killed, including nineteen children. (Photo by Spencer Platt/Getty Images)
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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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