Stocks close mixed as the Dow falls 444 points and the 10-year yield ends at 5.29% despite softer PCE

Stocks ended the last day of September split. The S&P 500 fell 19.30 points, or 0.25%, to 7,651.54 after being up nearly 0.7% during the session, CNBC reported. The Nasdaq Composite rose 0.24% to 26,861.06, and the Dow Jones Industrial Average lost 443.87 points, or 0.86%, to 50,906.05. It was the S&P 500's third straight decline.

Softer inflation, higher long yields

The Bureau of Economic Analysis said PCE prices rose 3.4% in the year to August, with core at 3.0%, both below forecasts. As we reported this morning, most of that downside surprise came from revisions: revised July was already at 3.4% and 3.0%. Traders still trimmed the odds of an October Fed hike to 35% from about 51% a day earlier, according to CME FedWatch data cited by CNBC. ADP said private employers added 90,000 jobs, above the 68,000 expected.

The bond market split in two. Treasury's official curve shows the 2-year yield down 1 basis point to 4.88%, while the 10-year rose 3 to 5.29% and the 30-year rose 5 to 5.64%. The gap between the 10-year and 2-year widened to 0.41 point from 0.37 point on Tuesday. For borrowers, that is the difference that matters: a credit line priced off prime tracks the Fed, where hike odds eased today, while fixed-rate loans and mortgages track the 10-year, which kept climbing (our 10-year story, chart: 10-year T-note).

Sectors and movers

Technology was the only major sector fund to finish higher, with the Technology Select Sector SPDR up 0.64% by Yahoo Finance closing data. Consumer staples fell 1.53%, health care 1.35%, industrials 1.27% and financials 1.13%. Meta fell 1.84% but, per CNBC, was still up almost 29% for September as of midday. McDonald's lost 1.3% and was on pace for a drop of more than 11% for the month, CNBC reported. WTI crude futures rose about 1.3% to $90.55 a barrel.

For the month, CNBC said the S&P 500 fell 0.5%, the Dow 4.3% and the Nasdaq gained 1.9%. For the third quarter, the S&P 500 rose 2% and the Nasdaq 2.5%, while the Dow lost 2.7%.

What comes next

Thursday brings weekly jobless claims and ISM manufacturing, forecast at 55, according to our calendar. The September jobs report follows Friday. Forecasts for payrolls range from 84,000 (the figure CNBC cited) to 90,000 on our calendar.

Sources: CNBC, U.S. Treasury, Bureau of Economic Analysis, Yahoo Finance, Chronicle markets board. WTI is the latest Yahoo Finance futures quote after the stock close. This is market information, not investment advice.