U.S. equities finished mixed to begin Q4, with the Dow and S&P 500 getting a boost from an agreement between Canada and the U.S., in conjunction with a deal with Mexico in August, to pave the way for a change to NAFTA. The Nasdaq, however, lost modest ground, paring early gains. The gains came despite some softer-than-expected reads on manufacturing out of China, Japan, the Eurozone and the U.S. Meanwhile, Treasury yields and the U.S. dollar were higher, gold lost ground and crude oil prices jumped on reports that President Trump discussed efforts to maintain supplies with Saudi Arabian King Salman. In equity news, GE named a new Chairman and CEO, while Tesla and CEO Elon Musk reached settlements with the SEC.

The Dow Jones Industrial Average (DJIA) increased 193 points (0.7%) to 26,651, the S&P 500 Index was 10 points (0.4%) higher at 2,924, while the NASDAQ Composite was 9 points (0.1%) lower at 8,037. In moderate volume, 788 million shares were traded on the NYSE and 2.2 billion shares changed hands on the NASDAQ. WTI crude oil jumped $2.05 to $75.30 per barrel and wholesale gasoline was up $0.04 at $2.13 per gallon. Elsewhere, the Bloomberg gold spot price lost $1.10 to $1,189.78 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was 0.2% higher at 95.30.

The Institute for Supply Management (ISM) Manufacturing Index for September declined to 59.8 from the unrevised 61.3 in August, versus the Bloomberg forecast calling for a dip to 60.0, with a reading above 50 denoting expansion. This index retreated slightly from August’s highest level since May 2004, as new orders dropped 3.3 points to 61.8, supplier deliveries fell 3.4 points to 61.1, inventories declined to 53.3, order backlogs moved lower to 55.7, and prices decreased to 66.9. However, production ticked higher to 63.9, employment nudged up to 58.8 and new export orders rose slightly to 56.0. ISM said respondent comments reflected continued expanding business strength, but were again “overwhelmingly concerned” about tariff-related activity.

Construction spending ticked 0.1% higher month-over-month (m/m) in August, versus projections of a 0.4% increase, and following July’s upward revision to a 0.2% gain. Residential spending declined 0.7% m/m, and non-residential spending rose 0.7%.

Treasuries finished lower, as the yield on the 2-year note was little changed at 2.82%, while the yields on the 10-year note and the 30-year bond rose 4 basis points to 3.09% and 3.24%, respectively. The U.S. dollar was higher amid a positive development from the global trade front as the U.S. and Canada reached a deal, joining Mexico’s agreement in August, paving the way to an overhaul of NAFTA. The new deal will be named the United States-Mexico-Canada Agreement. The Canadian dollar and Mexican peso rallied on the news.

©2018 Charles Schwab & Co., Inc., Member SIPC. All rights reserved.

Schwab Center for Financial Research (“SCFR”) is a division of Charles Schwab & Co., Inc. The information contained herein is obtained from third-party sources and believed to be reliable, but its accuracy or completeness is not guaranteed. This report is for informational purposes only and is not a solicitation, or a recommendation that any particular investor should purchase or sell any particular security. The investment information mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision. All expressions of opinions are subject to change without notice in reaction to shifting market conditions.