US close: Stocks stage late rally as Powell discusses future rate cuts

US stocks registered mild gains on Monday after a late rally following comments from Federal Reserve chair Jerome Powell, who indicated that interest-rate cuts would continue – albeit by a reduced amount – in the coming months.

After swinging between gains and losses for most of the session, Wall Street's three main indices pushed into positive territory in the final hour of trade, with the Dow and S&P 500 both setting new closing highs, breaking records set just last week.

The Dow inched 0.04% higher to 42,330.15, while the S&P 500 rose 0.42% to 5,762.48. The Nasdaq also gained 0.38% to 18,189.17.

Speaking at a conference in Nashville, Powell said the economy was in "solid shape" and "we intend to use our tools to keep it there". Following a 50-basis point (bp) cut to interest rates two weeks ago, Powell said that two further 25bp cuts would be likely this year, if the economy performs as expected.

"With the Fed teeing up more cuts, the stock market’s rally still has legs, and investors can sleep easy knowing that the Fed is ready to roll out 'insurance' cuts as potential risks creep into the economic picture," said Stephen Innes, managing partner at SPI Asset Management. "And with inflation seemingly under control, market pressure for deeper Fed rate cuts isn't going anywhere."

In economic news on Monday, the Chicago Business Barometer purchasing managers' index (PMI) increased to 46.6 this month, from 46.1 in August, rising for the second straight month. While this beat the consensus forecast of 46.2, the index has remained in negative territory since late last year.

Market movers

US-listed shares in Stellantis tumbled after the Chrysler, Peugeot and Jeep maker became the latest auto manufacturer to scale back vehicle delivery forecasts this year, cutting shipment estimates for North America while citing increased competition from China. The Netherlands-based company said its adjusted operating income margin is now expected to average between 5.5% and 7.0% for the full year, compared with earlier guidance for a double-digit percentage.

Stellantis follows in the footsteps of European peers Aston Martin, Volkswagen, Mercedes-Benz and BMW to issue profit warnings in recent weeks. Wall Street names like General Motors and Ford all fell on Monday.

In contrast, US-listed shares of Chinese EV maker Nio jumped after announcing a RMB13.3bn ($1.9bn) cash injection into the business from its parent company and strategic investors.

Anglo-American cruise giant Carnival was in the red, even after it reported record-breaking financial results for the third quarter, surpassing its earlier guidance and raising its full-year outlook for the third time. The stock has risen by around 35% over the past year, so an element of profit-taking could have been behind Monday's fall.

Dow Jones - Risers

Apple Inc. (AAPL) $233.00 2.29%
Home Depot Inc. (HD) $405.20 1.42%
Chevron Corp. (CVX) $147.27 1.22%
Walmart Inc. (WMT) $80.75 1.22%
Microsoft Corp. (MSFT) $430.30 0.53%
Unitedhealth Group Inc. (UNH) $584.68 0.49%
Johnson & Johnson (JNJ) $162.06 0.41%
Cisco Systems Inc. (CSCO) $53.22 0.38%
McDonald's Corp. (MCD) $304.51 0.27%
Walt Disney Co. (DIS) $96.19 0.19%

Dow Jones - Fallers

Boeing Co. (BA) $152.04 -2.74%
Intel Corp. (INTC) $23.46 -1.88%
Nike Inc. (NKE) $88.40 -1.16%
Walgreens Boots Alliance, Inc. (WBA) $8.96 -1.10%
Salesforce.Com Inc. (CRM) $273.71 -1.06%
Travelers Company Inc. (TRV) $234.12 -0.84%
Dow Chemical Co. (DOW) $54.63 -0.82%
Goldman Sachs Group Inc. (GS) $495.11 -0.68%
3M Co. (MMM) $136.70 -0.44%
Procter & Gamble Co. (PG) $173.20 -0.20%

S&P 500 - Risers

Nektar Therapeutics (NKTR) $1.30 11.11%
Gap Inc. (GAP) $22.05 2.94%
Macy's Inc. (M) $15.69 2.89%
FMC Technologies Inc. (FTI) $26.23 2.62%
Intuitive Surgical Inc. (ISRG) $491.27 2.52%
CVS Health Corp (CVS) $62.88 2.44%
FedEx Corp. (FDX) $273.68 2.29%
Apple Inc. (AAPL) $233.00 2.29%
Perrigo Company plc (PRGO) $26.23 2.26%
Resmed Inc. (RMD) $244.12 2.14%

S&P 500 - Fallers

Jacobs Solutions Inc. (J) $130.90 -15.84%
Advance Auto Parts (AAP) $38.99 -5.78%
Dollar Tree Inc (DLTR) $70.32 -3.83%
Ulta Salon, Cosmetics & Fragrance Inc. (ULTA) $389.12 -3.69%
Leggett & Platt Inc. (LEG) $13.62 -3.54%
Micron Technology Inc. (MU) $103.71 -3.53%
Dollar General Corp (DG) $84.57 -3.15%
Lamb Weston Holdings, Inc. (LW) $64.74 -3.08%
Franklin Resources Inc. (BEN) $20.15 -3.08%
American Airlines Group (AAL) $11.24 -2.77%

Nasdaq 100 - Risers

Intuitive Surgical Inc. (ISRG) $491.27 2.52%
Apple Inc. (AAPL) $233.00 2.29%
Cintas Corp. (CTAS) $205.88 1.74%
eBay Inc. (EBAY) $65.11 1.73%
Automatic Data Processing Inc. (ADP) $276.73 1.41%
Verisk Analytics Inc. (VRSK) $267.96 1.40%
Autodesk Inc. (ADSK) $275.48 1.32%
Alphabet Inc. Class A (GOOGL) $165.85 1.16%
Alphabet Inc. Class C (GOOG) $167.19 1.15%
Qurate Retail Inc. (QRTEA) $0.61 1.04%

Nasdaq 100 - Fallers

Dollar Tree Inc (DLTR) $70.32 -3.83%
Ulta Salon, Cosmetics & Fragrance Inc. (ULTA) $389.12 -3.69%
Micron Technology Inc. (MU) $103.71 -3.53%
Trip.com Group Limited (TCOM) $59.43 -3.08%
Sirius XM Holdings Inc (SIRI) $23.65 -2.99%
American Airlines Group (AAL) $11.24 -2.77%
Intel Corp. (INTC) $23.46 -1.88%
Wynn Resorts Ltd. (WYNN) $95.88 -1.78%
Marriott International - Class A (MAR) $248.60 -1.75%
Western Digital Corp. (WDC) $68.35 -1.54%