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Russell 2000

The Russell 2000 is Giving off an Alert

On Monday, U.S. markets exhibited mixed trends, with the Dow Jones Industrial Average being the sole major index to dip. The small-cap Russell 2000 turned negative for the year, highlighting uncertainties. In Europe, the Stoxx 600 declined by 1.03% as eurozone manufacturing continued to sharply decline in September.

Tesla faced speed bumps in the third quarter, delivering 435,059 vehicles, a 6.6% drop from the second quarter. The company attributed the decline to planned downtimes for factory upgrades, falling short of Wall Street’s expectation of 461,640 vehicle deliveries.

Pershing Square’s Bill Ackman expressed concern about the U.S. economy, stating it’s still solid but weakening. Rising Treasury yields are adding to the economic slowdown. Ackman anticipates the 30-year yield testing mid-5% and the 10-year approaching 5%. However, he clarified that he hadn’t discussed a deal involving X with Elon Musk.

Microsoft CEO Satya Nadella testified in a federal court about the dominance of the “Google Web” in the open web space. Nadella highlighted how publishers often tailor content and advertising to Google’s products, illustrating the significant influence Google holds over web publishing.

Goldman Sachs predicts that the Federal Reserve’s commitment to keeping interest rates higher for longer will impact corporate profitability. Despite this, the firm believes some stocks are immune to the negative effects of higher rates.

While a stopgap bill brought relief to the markets, concerns grew over increasing Treasury yields. The Russell 2000, composed of small companies and considered a reflection of the U.S. economy, turned negative for the year, signaling potential economic challenges ahead. The index’s year-to-date loss may suggest further declines for stocks later in the year, although opinions on this vary among analysts.