Late Rally Lifts Index to Record To Close Out Q3

After trading in negative territory for most of the day, major U.S. equities indexes rallied in the afternoon to close out the first session of the new week and the final day of the third quarter with gains.

In a speech and question-and-answer session on Monday, Federal Reserve Chair Jerome Powell said the central bank remains committed to lowering interest rates to support the economy but emphasized future cuts will likely come in smaller increments than this month’s 50-basis-point reduction.

The S&P 500 added 0.4% to end the third quarter of the year with a record close. The Nasdaq was also up 0.4%, while the Dow closed with a minimal gain of less than 0.1%.

Amentum Holdings (AMTM) shares skyrocketed 25.6%, notching the top performance in the S&P 500 as the stock marked its first day of trading and its debut on the benchmark index. Amentum stock hit the market after the completion of its spinoff from the engineering and construction firm Jacobs Solutions (J). The newly independent public company focuses on government services.

It was also a strong trading day for Solventum (SOLV), the health care supplier that completed its separation from 3M (MMM) in April. Solventum shares added 3.2% following reports that the company is exploring the possibility of moving its headquarters to a former Blue Cross Blue Shield site in Eagan, Minnesota, counteracting speculation that the company might exit the state.

Shares of Generac (GNRC). a provider of home generators and emergency power solutions, were up 2.6%, adding to gains posted late last week after Hurricane Helene caused devastating impacts across several states. Other storms in the past, including Hurricane Beryl earlier this year, have contributed to similar upticks in Generac’s share price.

CVS Health (CVS) shares added 2.4% following reports by The Wall Street Journal that the hedge fund Glenview Capital intends to meet with representatives of the pharmacy giant to suggest strategies for improving its operations.

Following a protracted labor dispute, workers at ports on the Gulf and East coasts reportedly plan to go on strike starting at midnight. The pending labor action pressured shares of companies that depend on the ports to receive critical goods. Shares of discount retailer Dollar Tree (DLTR), which imports a significant percentage of its merchandise, fell 3.8%, the steepest loss of any S&P 500 stock.

Shares of cosmetics retailer Ulta Beauty (ULTA) fell 3.7%. Although the stock posted strong gains last month after Berkshire Hathaway (BRK.A) revealed a stake in the company, analysts say Ulta faces a difficult competitive environment and a post-pandemic normalization in demand.

Shares of carmakers came under pressure on Monday after Jeep manufacturer Stellantis (STLA) reduced its 2024 profit guidance, citing soft global demand and competition in China. Stellantis shares plunged 12.5%, while shares of General Motors (GM) lost 3.5%.