LIVE MARKETS-Tech outperforms as rate-hike bets retreat

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TECH OUTPERFORMS AS RATE-HIKE BETS RETREAT

US stocks finished September on a mixed note Wednesday, with the S&P 500 .SPX and Dow .DJI losing ground, while the Nasdaq .IXIC ended higher after a cooler-than-expected inflation report eased concerns that the Federal Reserve may need to raise rates again in October.

The inflation data prompted traders to scale back rate-hike expectations. According to CME FedWatch, the odds of the Fed holding rates steady at its October 27-28 meeting rose to 63%, up from 55% before the report. Meanwhile, the probability of a quarter-point hike fell to 37% from 45%.

Nine of the S&P 500's 11 sectors ended lower, with 5 of the losers each giving up more than 1%. Consumer staples .SPLRCS, down about 1.7%, led the declines. On the upside, technology .SPLRCT rose 0.6%, and consumer discretionary .SPLRCD added 0.13%.

Technology hit record intraday highs, but gains faded into the close. Even so, software and services .SPLRCIS, up 1%, provided notable support within the sector. Elsewhere, housing-related stocks .HGX, transports .DJT, and gold and silver miners .XAU were among the laggards.

The Nasdaq's advance came even as Treasury yields continued to push higher. The benchmark 10-year Treasury yield climbed to 5.3061%, its highest level since June 2007, when it reached 5.333%. The yield has since backed away to around 5.29%, but it remains on track to extend its winning streak to seven sessions. The last time the 10-year yield rose for longer was a nine-day run in September 2017.

After a volatile month, the S&P 500 finished September slightly lower, down 0.45%. The Nasdaq gained 1.9%, helped by continued strength in technology shares, while the Dow fell 4.3%, snapping a five-month winning streak.

Here is a snapshot of where markets stood shortly after 4 p.m. EDT.

(Terence Gabriel)

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