U.S. stock markets closed mixed on Wednesday after a choppy session to finish a volatile September. Market participants remained concerned about the continued northward movement of U.S. government bond yields. Investors ignored a series of favorable key economic data released yesterday. The Dow and the S&P 500 ended in negative territory while the Nasdaq Composite finished in the green.

For the last month, the Dow and the S&P 500 ended in negative territory too while the Nasdaq Composite finished in positive territory. However, for third-quarter 2026, the S&P 500 and the Nasdaq Composite closed in positive territory while the Dow ended in red.

How Did the Benchmarks Perform?

The Dow Jones Industrial Average (DJI) fell 0.9% or 443.87 points to close at 50,906.05. Notably, 22 components of the 30-stock index ended in negative territory, while eight ended in positive territory. At the intraday high, the blue-chip index was up more than 124 points.

The tech-heavy Nasdaq Composite ended at 26,861.06, rising 0.2% on strong performance by technology bigwigs. At the intraday high, the index was up nearly 311 points. The major gainer of the tech-laden index was Synopsys Inc. SNPS. The stock price of the AI-led software giant climbed 4.8%. Synopsys currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The S&P 500 declined 0.3% to finish at 7,651.54. Seven out of 11 sectors of the broad-market index ended in negative territory while four finished in positive territory. The Energy Select Sector SPDR (XLE) fell 0.9%. On the other hand, the Utilities Select Sector SPDR (XLU) rose 1.2%.

The fear gauge CBOE Volatility Index (VIX) was up 1.9% to 16.34. A total of 18.13 billion shares were traded on Wednesday, higher than the last 20-session average of 17.06 billion. Decliners outnumbered advancers by a 1.66-to-1 ratio on the NYSE. On the Nasdaq, a 1.51-to-1 ratio favored declining issues.

Government Bond Yields Soar

The yield on the benchmark U.S. 10-Year Treasury Note briefly touched 5.3% on Wednesday, marking its highest level since June 2007. The yield on the long-term 30-Year U.S. Treasury Note reached 5.642%, reflecting its highest level since June 2002. The yield on the short-term 2-Year U.S. Treasury Note fell to 4.883%.

Favorable Economic Data

The Department of Commerce reported that the personal consumption expenditure price index (PCE inflation) rose 0.3% in August, lower than the Zacks Consensus Estimate of 0.4%. The metric for July was revised downward to 0.1% from 0.2% reported earlier. Year over year, the headline PCE inflation rose 3.4% in August. 

Core PCE inflation (excluding volatile food and energy items) — the Fed’s favorite inflation gauge — rose 0.2% in August, lower than the Zacks Consensus Estimate of 0.3%. The metric for July was revised downward to 0.1% from 0.2% reported earlier. Year over year, the core PCE inflation rose 3% in August. However, the data remained highly elevated from the Fed’s targeted 2% level. 

Personal income rose 0.2% in August, missing the Zacks Consensus Estimate of 0.5%. The metric for July was revised downward to 0.3% from 0.4% reported earlier. Personal spending rose 0.9% in August, beating the Zacks Consensus Estimate of 0.8%. The metric for July was revised downward to 0.1% from 0.2% reported earlier. Personal savings rate fell to 4.1% in August from 4.6% in July.

The Department of Commerce raised its final estimate of the second-quarter 2026 U.S. GDP growth rate to 2.2%, significantly higher than the prior estimate of 1.5%. Higher contribution from consumer and government spending as well as investments were the primary drivers for the revised growth estimate. 

Strong Private Payrolls Data

Automatic Data Processing Inc. ADP reported that the private payrolls in September came in at 90,000, beating the consensus mark of 68,000 and downwardly revised data of 36,000 for August. The services sector added 59,000 jobs while the goods-producing sector added 31,000 jobs.

Monthly Roundup

Historically September is known as the worst-performing month on Wall Street. This year too, September was volatile. The S&P 500 and the Dow fell 0.5% and 4.3%, respectively. However, the Nasdaq Composite rose 1.9%.

Quarterly Roundup

Third-quarter 2026 was also mixed for U.S. stocks. The S&P 500 and the Nasdaq Composite rose 25 and 2.5%, respectively. However, the Dow fell 2.7%. Wall Street witnessed strong July and August partially offset by a volatile September.

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