Dow slides to begin October even as Congress staves off government shutdown: Live updates

The Dow closed slightly lower Monday.

The 30-stock average ticked down about 74 points, or 0.2%. Meanwhile, the S&P 500 inched up 0.01%, while the Nasdaq Composite gained 0.6%.

— Hakyung Kim

Some notable growth stock funds were underperforming the major indexes during Monday's market slump, even as the Nasdaq Composite outperformed.

Cathie Wood's Ark Innovation ETF (ARKK) fell about 2% on the day. The Invesco Solar ETF (TAN) dropped more than 4%.

Some of the larger AI-funds were also slightly underperforming, with the First Trust Nasdaq Artificial Intelligence and Robotics ETF (ROBT) dipping about 1.2%.

— Jesse Pound

Loan volume and demand both are deteriorating while credit standards, particularly in commercial real estate, are tightening, according to a Dallas Federal Reserve survey released Monday.

The closely watched view of the financial system showed that 42% of respondents reported loan volume decreasing while 49.3% saw demand down in September.

On a net basis of those reporting an increase against decrease, the level for volume dropped to -15.9 percentage points while the demand reading was at -34.4 percentage points. That compared to respective August readings of -2.8 and -27.1

Credit standards also showed signs of tightening across sectors, but particularly in the commercial space, which saw a net reading of -30.7 percentage points for banks that saw easing against tightening restrictions. The level was at -22.1 in August.

"Bankers remain pessimistic, with expectations for increasing loan nonperformance, decreasing loan demand and worsening business activity over the next six months," the Dallas Fed stated.

—Jeff Cox

S&P 500 Utilities slumped as much as 5.5% intraday Monday in their worst one-day slide since April 2020 as the yield on the benchmark 10-year Treasury note climbed as high as 4.701%, the highest in 16 years. Utilities, a capital-intensive business that's constantly rolling over debt which in this interest rate environment means a heavier cost burden eating into profits, are on pace for their lowest close since June 2020.

Utilities are far and away the day's worst performers in the S&P 500, with energy stocks trailing a distant second, down 2.1%.

"[Y]ields continue to wreak havoc with Utilities (XLU) having their worst day since Covid" on Monday, Jonathan Krinsky, chartered market technician at BTIG, wrote to clients.

Leading the way for the utilities are NextEra Energy, down 11.8%, AES Corp., lower by 6.3%, PG&E, losing 5.3%, NiSource, off by 5.2% and Dominion Energy, which is weaker by 5%. Every utility in the S&P 500 is lower Monday, none by less than 2.6%.

— Scott Schnipper, Gina Francolla, Michael Bloom

Federal Reserve Vice Chair for Supervision Michael Barr said Monday that he sees higher interest rates staying in place for an extended period of time.

The top banking supervisor noted that there should be more focus on how long rates will need to remain elevated, instead of whether the central bank is going to push through one more hike before the end of the year.

"Given how far we have come, we are now at a point where we can proceed carefully as we determine the extent of monetary policy restriction that is needed," Barr told the Forecasters Club of New York in prepared remarks.

"In my view, the most important question at this point is not whether an additional rate increase is needed this year or not, but rather how long we will need to hold rates at a sufficiently restrictive level to achieve our goals. I expect it will take some time," he added.

Also during the speech, Barr expressed concern over higher-cost funding banks have had to take on this year to make up for lost deposits following the blowup of Silicon Valley Bank in March.

—Jeff Cox

Poor breadth is a bad sign for the S&P 500.

The broad index has slipped about 0.6% in the session. But less than 70 or the slightly more than 500 member stocks traded positively, meaning the lion's share of companies were down in the session.

NextEra led those stocks lower with a loss of nearly 10%. Kellanova and AES followed, with both down more than 6%.

A handful of technology names were among the small group of S&P 500 stocks trading up in the session. Notably, Amazon, Apple, Meta and Alphabet all added more than 1%.

Discover Financial was the best performer in the S&P 500, up more than 5%.

— Alex Harring

Investors should start setting up for 2024 as markets deal with a little more volatility, according to Shannon Saccocia, chief investment officer at NB Private Wealth.

"This fourth quarter could be a setup for complacency and in terms of what happens next," Saccocia said Monday on CNBC's "Halftime Report."

The investment chief was more positive on defensive sectors such as consumer staples and utilities, as well as health care stocks — all areas that underperformed this year. Utilities is off by about 20% this year, and consumer staples is off by roughly 7%. Health care is down by more than 6%.

"Think about the places in your portfolio that you probably are underweight, and add some to that," said Saccocia, adding, "Not that they'll necessarily be the best place to be in December of this year, but looking forward to 2024, we're going to digest these higher rates and reset to our new level. And this is where you're going to want to be when we start to see some of that consumer slowdown."

— Sarah Min

A wave of ether futures ETFs is hitting the market on Monday, expanding the ways investors can use ETFs to bet on cryptocurrencies.

The new funds include:

• BitWise Ethereum Strategy ETF (AETH)
• Bitwise Bitcoin and Ether Equal Weight Strategy ETF (BTOP)
• ProShares Ether Strategy ETF (EETH)
• ProShares Bitcoin & Ether Equal Weight Strategy ETF (BETE)
• Bitcoin & Ether Market Cap Weight Strategy ETF (BETH)
• VanEck Ethereum Strategy ETF (EFUT)

The launches could be interpreted as a positive signal about the SEC's approach to spot bitcoin funds, which have had their decision date pushed back by the regulator.

"I do think the approval and launch of these [ether futures] products is a positive sign that we're on the path to spot crypto products in the relatively near future," Bitwise CIO Matt Hougan said.

— Jesse Pound

Detroit automakers are feeling some pain as the United Auto Workers strike enters its third week and additional plants are targeted.

"A ~2-week strike at Lansing Delta, Wentzville (already on strike) and the reported downtime at Fairfax could negatively impact GM's EBIT by an est. ~$0.2 billion, holding all-else-equal, including any additional impacts from the parts/distribution strike," Citi analyst Itay Michaeli wrote in a note Friday. Ford could see the same $0.2 billion hit from a two-week strike in Chicago and its Michigan Assembly plant, he added.

Meanwhile, Bank of America Securities estimates the cumulative impact on earnings before interest and taxes is $163 million for General Motors, $203 million for Ford and $187 million for Stellantis.

"Although there will likely be some volatility as production is taken down, it appears the ultimate increase in labor costs will likely be close to our expectations in January for a 25%-30% cumulative increase over four years," analyst John Murphy wrote in a Friday note. "In isolation, this would be about a 400-500bp headwind to operating margins."

— Michelle Fox

With the resolution of the writers strike and optimism about negotiations with the actors union, Warner Brothers Discovery is poised to exit this period of Hollywood labor strife with little long-term damage, Bank of America analyst Jessica Reif Ehrlich said in a note to clients Monday.

"While the strikes provided a near term benefit to FCF, we are encouraged the industry can return to work, especially for WBD which is among the largest content creators in the industry. For WBD, we expect the company to maintain their recently revised guidance, as it may take several weeks/months to fully ramp content production. However, we are hopeful the few months leading up to year end will enable the company to enter CY24 at more normalized levels of output and insulate the financial impact to CY23 results," the note said.

Bank of America has a buy rating and a $21 price target on Warner Brothers Discovery. The stock fell about 1% in morning trading.

— Jesse Pound

Forty-one stocks in the S&P 500 hit fresh 52-week lows in midday trading Monday, including several energy and consumer names.

Dominion Energy traded at lows not seen since January 2011, with shares last down 6%. NextEra Energy reached lows last seen in March 2020.

Campbell Soup hit lows not seen since December 2021, while J.M. Smucker traded at lows not since June 2022.

Here are some of the other fresh S&P 500 lows:

• Target traded at lows not seen since May 2020
• Northern Trust traded at lows not seen since May 2020
• Bristol-Myers Squibb traded at lows not seen since December 2021
• 3M traded at lows not seen since November 2012
• SolarEdge Technologies traded at lows not seen since May 2020
• American Electric Power traded at lows not seen since April 2020

— Michelle Fox, Chris Hayes

These are some of the stocks making the biggest midday moves:

• Sphere — Shares of the media and entertainment company climbed 10% in midday trading after a U2 show debuted its Las Vegas Sphere venue on Friday night.
• Discover Financial Services — The credit card issuer surged almost 6% after it disclosed in an 8K filing with the Securities and Exchange Commission a consent agreement with the Federal Deposit Insurance Corp.
• Instacart — Maplebear, the food delivery company doing business as Instacart, fell roughly 5% in midday trading. On Monday, The Information, citing people familiar with the matter, reported the Wall Street bank that underwrote Instacart's initial public offering forecast a weak second-half outlook with slower revenue growth and lower profits.

See the full list here.

— Alex Harring

Electric vehicle maker Rivian Automotive could be the "next Tesla," according to Evercore ISI analyst Chris McNally.

McNally upgraded the stock to outperform from in line on Monday, and assigned a price target that implies shares could jump about 44.2% over the next 12 months. "RIVN has a brand that has stuck the US landing, and most importantly, within segments everyone already wants (SUV, Truck, Van)," he said in a note.

Rivian stock inched up 0.1% Monday, climbing down from its premarket jump. CNBC Pro subscribers can read more here.

— Pia Singh

The World Bank forecasts growth in in the developing East Asia and Pacific region to remain strong at 5% in 2023. However, its expects growth to ease in the second half of 2023 and fall to 4.5% in 2024, according to its regional update published on Sunday.

Regional growth in the Asia-Pacific region is estimated to come in higher than average growth projected for all other emerging market and developing economies. To be sure, the recent numbers are lower than were previously projected.

Growth in China in 2023 is projected to be 5.1%. Excluding China, regional growth is expected to come in at 4.6% .

— Hakyung Kim

Every stock in the S&P 500 Energy Index is trading lower Monday as West Texas Intermediate crude oil falls 1.5% to below $90 a barrel. Brent crude is 1% lower and natural gas is down 2.2% Monday.

The group of energy stocks in the S&P 500 is falling 2.1%, making it the second-worst sector surpassed only utilities, which are tumbling 4%.

Marathon Oil and APA Corp. are down 4.6% and 3.9%, respectively, on Monday to lead the energy group, trailed by EQT Corp and Occidental Petroleum, which are falling more than 3%.

Saudi Arabia could start to ease its additional voluntary supply cut of 1 million barrels per day (bpd), Reuters said Monday, citing a report from ING analysts.

— Scott Schnipper

U.S. Steel is undergoing a transformation to become a tech-savvy steelmaker, making it an attractive play, according to Morgan Stanley. 

Analyst Carlos De Alba upgraded the steelmaker to overweight from equal weight and named it a top pick on "the expected value creation from the company's transformational investments."  His new price target implies the stock could gain roughly 23.2% over the next 12 months.

CNBC Pro subscribers can read more here.

Pershing Square's Bill Ackman sounded alarms on the economy, which he believes has begun to decelerate on the back of aggressive rate hikes.

″[T]he Fed is probably done. I think the economy is starting to slow," Ackman said on CNBC's "Squawk Box." "The level of real interest rates is high enough to slow things down."

The billionaire hedge fund manager said he believes long-term Treasury yields could shoot even higher in the current environment. He sees the 30-year rate testing the mid-5% and the benchmark 10-year approaching 5%. Ackman said he's still shorting 30-year Treasury bills as a hedge.

— Yun Li

UBS analyst William Grippin initiated coverage of residential solar company Sunnova Energy with a buy rating and a price target that suggests shares can gain more than 50%.

"We see NOVA as well-positioned to take market share driven by increasing demand for third-party-owned (TPO) residential solar systems which have relatively more favorable tax treatment under the Inflation Reduction Act," Grippin said in a Monday note. 

CNBC Pro subscribers can read more here.

— Pia Singh

The S&P 500 utilities sector fell more than 3% Monday morning, reaching its lowest level since September 2020. NextEra Energy, AES and Eversource led the declines, losing 5.2%, 3.8% and 2.9%, respectively.

Overall, the sector is the worst performer in the S&P 500 for the year, down more than 19%.

— Fred Imbert

The manufacturing sector in September broke a nine-month streak of contracting, albeit barely.

The Institute for Supply Management's manufacturing index for the month posted a reading of 49, 1.4 points better than August and a touch higher than the Dow Jones estimate for 48. While the index ostensibly measures the percentage of companies reporting expansion versus contraction, the ISM said a reading above 48.7 has been consistent with growth.

Internally, the biggest gains came from employment, new orders and production. Importantly, the prices index fell to 43.8, a drop of 4.6 points. Employment gained 2.7 points to 51.2.

—Jeff Cox

Tesla said it delivered 435,059 vehicles in the third quarter, while producing 430,488 during that time period. That's below second-quarter delivery and production numbers of 466,140 and 479,700, respectively.

"A sequential decline in volumes was caused by planned downtimes for factory upgrades, as discussed on the most recent earnings call," the company said. "Our 2023 volume target of around 1.8 million vehicles remains unchanged."

Tesla shares were down more than 3% in the premarket.

— Fred Imbert

Nvidia has been the market leader this year, and Goldman Sachs expects it to maintain that position going forward.

The bank added the chipmaker to its Americas conviction list for the month, saying it expects the GPU provider to "maintain its status as the accelerated computing industry standard for the foreseeable future."

Companies on Goldman's list were chosen from the firm's shortlist of 20 to 25 buy-rated stocks across its Americas coverage. CNBC Pro subscribers can read more on the chosen companies here.

— Pia Singh

U.S. stocks opened down for the first trading session of the month and quarter.

The Dow Jones Industrial Average fell 51 points, or 0.1%. The S&P 500 and Nasdaq Composite declined 0.2% and 0.03%, respectively.

— Hakyung Kim

German shoemaker Birkenstock said Monday it is targeting a valuation of up to $9.2 billion in its much-anticipated public debut on the New York Stock Exchange.

The company said it's selling 32.26 million shares to raise about $1.58 billion in its initial public offering, according to a filing with the U.S. Securities and Exchange Commission. The IPO will be priced between $44 and $49 per share.

Birkenstock shares are set to trade under the symbol "BIRK."

— Sarah Min, Fred Imbert

Crypto prices rallied on Monday, pushing bitcoin to its highest level more than six weeks.

Bitcoin rose more than 4.5% to $28,329, for its highest level since Aug. 17, when it traded as high as 29,108.3. Ether rose more than 3% to cross above $1,700.

Crypto-related stocks Coinbase, Marathon Digital, MicroStrategy and Riot all rose more than 5% in premarket trading.

— Hakyung Kim, Jesse Pound, Gina Francolla

December gold futures contracts fell to $1846.60 the ounce Monday, the lowest since March 10, 2023 (when it traded at $1830).

December silver contracts similarly dropped to $21.725 the ounce, their weakest since March 16 ($21.59).

Both the Gold Miners (GDX) and Silver Miners (SIL) ETFs are down almost 1% in early, premarket trading, led by Harmony Gold, Gold Fields and AngloGold, all down by 3% or more.

— Scott Schnipper, Gina Francolla

Jefferies analyst Matthew Taylor upgraded Insulet to buy from hold on Monday, attributing his new rating to the company's recent underperformance on GLP-1 fears. GLP-1 drugs are most commonly associated with obesity and diabetes care and are becoming a major factor in weight loss medicine.

Insulet saw its share price hit an over three-year low in September on concerns that strong demand for these drugs could have a negative impact on sales of the company's insulin pumps.

"With more data supporting the case for CGMs to be un-impacted or positively impacted by GLP-1s and bullish fundamentals, we think the perceived overhang could be removed sooner on CGMs than on pumps or OSA stocks," he said.

The stock is trading roughly 4% higher in premarket hours Monday.

— Pia Singh

Check out the companies making headlines before the bell:

• Rivian Automotive — Shares popped 3.3% in the premarket. Evercore ISI upgraded Rivian Automotive to outperform from in line, and raised its price target, saying the electric truck maker could be the next Tesla and BYD.
• Sphere Entertainment — The stock jumped more than 7% after the entertainment and media company opened its Sphere venue in Las Vegas with a show from U2 on Friday night. The Sphere will host live concerts and sporting events.
• Insulet — Shares gained 3.4% in premarket trading. Jefferies upgraded the medical device maker to buy from hold, saying investors should take advantage of recent underperformance to add exposure.

Read the full list here.

— Sarah Min

Wheat is up 1% Monday morning, after previously hitting a three-year low of 540 cents per bushel Friday. The wheat market declined more than 6% Friday on data putting U.S. wheat production above expectations.

Soybeans hit a low of 1,265.75 cents per bushel. This marked its lowest level since Jun. 29, when soybeans traded as low as 1,260 cents.

On Friday, the Invesco DB Agriculture ETF hit the lowest level since Aug. 24.

— Hakyung Kim, Gina Francolla

Oppenheimer chief investment strategist John Stoltzfus thinks the market is trying to send the Federal Reserve a message.

"In some ways the current spate of weakness exhibited in the stock market feels like a lobbying effort by leveraged operators in the market directed towards the Fed looking to effect a policy change akin to the pivot that followed the selloff in the fourth quarter of 2018," the firm's chief investment strategist wrote.

Stocks sold off in late 2018 after the Fed raised rates. After that, the Fed proceeded to cut rates in 2019.

"Ironically our experience over four decades in the markets tells us stock prices can actually rise during rate hike cycles that are in process and lead to normalized interest rates after periods of economic and market crisis that had led to interest rates bottoming," Stoltzfus wrote.

— Fred Imbert, Michael Bloom

Coinbase shares were up 5% in the premarket after the crypto exchange announced it obtained a Major Payment Institution license from regulators in Singapore.

"This development ... amplifies our commitment to the Singapore market, enabling us to expand our provision of Digital Payment Token services to both individuals and institutions in Singapore," the company said in a post.

— Fred Imbert

European stocks opened cautiously higher Monday, looking for a fresh start after the weakest quarter of the year and two straight monthly declines.

The regional Stoxx 600 index was up by 0.3% at 8:10 a.m. London time, with France's CAC 40 gaining 0.5%, Germany's DAX up by 0.36% and the U.K.'s FTSE 100 up 0.07%.

— Jenni Reid

The Bank of Japan's policymakers evaluated a number of conditions that must be met before ending the central bank's ultra-loose policy during its September meeting.

"Sustainable and stable achievement of the price stability target, accompanied by wage increases, has not yet come in sight, and thus the Bank needs to patiently continue with monetary easing under yield curve control," the BOJ's summary of opinions stated.

One board member highlighted how the second half of the fiscal year ending March 2024 will mark an "important period" for determining whether the price stability target will be achieved.

"Even if the Bank were to terminate its negative interest rate policy, this can be considered as continuation of monetary easing if real interest rates remain negative. It is important for the Bank to carefully provide communication on this," another board member was quoted saying.

In September, Japan's central bank held its stance and left rates unchanged, on the back of "extremely high uncertainties" on the growth outlook domestically and globally.

—Lee Ying Shan

China's factory activity in September expanded for the first time April, data from the National Bureau of Statistics showed on Saturday.

China's PMI climbed to 50.2 in September from 49.7 in the previous month, beating Reuters' expectations of 50.0.

A reading above the 50-point level marks an expansion, while a figure below the 50-mark indicates a contraction. China's non-manufacturing PMI also inched up to 51.7 from a previous reading of 51.

Similarly, a private-sector survey reflected an expansion in China's factory activity, albeit at a slowed pace.

The Caixin/S&P Global manufacturing PMI dipped to 50.6 in September from 51.0., the survey showed on Sunday, missing forecasts of 51.2.

"Manufacturing conditions across China improved slightly for the second consecutive month in September," the press release stated.

"However, confidence regarding the year-ahead remained relatively subdued, which in turn contributed to a drop in employment at Chinese manufacturing plants," the report added.

—Lee Ying Shan

Monday kicks off a new trading month and quarter.

September was the worst month of the year for the S&P 500 and Nasdaq Composite. And for all three major indexes, the quarterly slides marked a pullback after a strong first half of the year. Despite the recent retreats, the three indexes are still up on the year due to the strength of the early 2023 rally.

Here's how the three indexes finished September and the third quarter:

The Dow:

• September: down 3.5%
• Quarter: down 2.6%

The S&P 500:

• September: down 4.9%
• Quarter: down 3.7%

The Nasdaq Composite:

• September: down 5.8%
• Quarter: down 4.1%

— Alex Harring

Lawmakers were able to pass a continuing resolution and evade a government shutdown on Saturday. The bill keeps the government operating for 45 more days, allowing more time for legislators to finalize funding proposals.

This development should be welcome news for the market and offer a boost coming off a tough week, according to Jamie Cox, managing partner at Harris Financial.

"There'll be a lot of unwinding of government shutdown selling from last week, which will be good," he said.

— Alex Harring

Stock futures were higher on Sunday, one day after federal lawmakers came to a temporary agreement that averted a government shutdown.

Futures tied to the Dow rose about 155 points, or 0.5%, shortly after 6 p.m. ET. S&P 500 futures added 0.6%, while Nasdaq 100 futures climbed 0.8%.

— Alex Harring