New York (AP) - Stocks are trading mixed on the first day of trading in October as investors remain unconvinced despite a tentative deal to avert a government shutdown. At the close, the Dow was down 74.15 points, or 0.22%, at 33,433.35. The S&P 500 was almost flat at 4,288.39. The Nasdaq rose 88.45 points, or 0.67%, to 13,307.77.

The Russell 2000 index, which tracks small-cap stocks, closed down 1.6 percent, turning gains into losses for the first time so far this year, with a 0.3 percent decline. With small-cap stocks accounting for most of the index's weight, the Russell 2000 is often seen as an insight into the health of the broader economy, and its decline highlights the current struggles of smaller companies.
In the past September, U.S. stocks performed poorly, with the S&P 500 down 4.9 percent last month and the Nasdaq down 5.8 percent, both Posting their biggest monthly declines of the year, as Treasury yields soared.
The federal government remains open until mid-November
The Senate passed a short-term funding bill just hours before the deadline, and the temporary resolution, signed by President Joe Biden over the weekend, keeps the U.S. government open until mid-November, an extension lawmakers can use to determine final funding levels.
Kevin Gordon, senior investment strategist at Charles Schwab, said that historically, the market doesn't care about government shutdowns, and even when they occur, the S&P 500 is basically flat from the beginning to the end of the shutdown. He believes the current economic environment is more important to the market. "Towards the end of the year, if we don't see improvement in key areas of the economy like housing, manufacturing, and there are more cracks in the labor market, I think that's certainly more important than the shutdown itself."
Economic data released today showed the U.S. manufacturing sector is still contracting. The Institute for Supply Management (ISM) released a report showing that the U.S. ISM manufacturing purchasing managers index (PMI) in September came in at 49, still below the contraction range, and for the 11th consecutive month below the 50-point line. Timothy Fiore, Chairman of the ISM Manufacturing Business Survey Committee, said: "The manufacturing sector continued to contract, but at a slower pace, recording its best performance since November 2022. Companies are still managing output moderately as order demand remains weak, but the month-on-month improvement in September's PMI is a positive sign."
Then there are the Fed officials who let loose eagles
Billionaire investor Bill Ackman, CEO of Pershing Square asset Management, said he believes the economy has begun to decelerate amid aggressive rate hikes. "The Fed may have done its job and real interest rates are high enough to slow the economy." He further said that high mortgage rates, as well as credit card rates, are starting to really work through the economy, which, while still solid, is softening. The hedge fund manager expects long-term Treasury yields to soar further in the current environment, predicting that the 10-year rate will test 5 percent. On Monday, the 10-year Treasury yield returned to a 15-year high, rising above 4.7 percent, which contributed to the pressure on U.S. stocks that day.
Federal Reserve Chairman Jerome Powell said at an event on Monday that the U.S. economy is still in the process of gradually recovering from the impact of the epidemic, and the central bank's focus is on the health of the economy, and price stability is a key cornerstone of the overall economy. Fed Vice Chairman Michael Barr said on the same day that interest rates will remain higher for an extended period of time. "I think the most important question right now is not whether we need to raise rates further this year, but how long we need to keep rates at sufficiently restrained levels to achieve the Fed's objectives, which I expect will take some time." Barr also used his speech to express concern about the banking sector, saying that after the collapse of Silicon Valley Bank in March, banks would have to bear higher funding costs to make up for lost deposits.
Tesla delivered nearly 440,000 vehicles last quarter
Among individual stocks, Tesla closed up 0.6 percent. The company released production and delivery data for the third quarter before the market closed. It produced 430,500 vehicles in the quarter ended September, up 17.7% from 365,900 in the same period last year. Total deliveries during the period were 435,100 units, up 26.6 percent from a year earlier and below Wall Street expectations of 461,600 units. However, from the sequential point of view, production and delivery have declined significantly, the car company in the second quarter of this year, the cumulative production of 479,700 vehicles, 466,100 vehicles delivered, meaning that last quarter Tesla production and delivery fell 10.3% and 6.7% respectively.
"As we discussed on our most recent earnings call, the sequential decline in sales is due to downtime due to plant upgrades, and we remain unchanged on our full-year 2023 sales target of approximately 1.8 million vehicles," Tesla wrote in the press release.