Shares of industrial and transportation companies experienced a surge following the release of unexpectedly robust factory data. Durable goods orders, which include long-lasting products like cars, rose by a stronger-than-anticipated 0.2% in August. This increase was primarily driven by higher defense spending related to supplies for the Ukrainian war.
This positive surprise initially appeared to be good news for the economy and possibly stocks. However, market analysts like Edward Moya, the senior market analyst at foreign-exchange brokerage Oanda Group, caution that good news for the economy can actually be perceived as bad news for equities. Signs of economic resilience may lead to more rate hikes from the Federal Reserve.
In the political arena, the Republican-controlled House and the Democratic-led Senate are at odds over federal funding, heightening the possibility of a government shutdown over the weekend.
On the automotive front, there have been "park outside" recalls issued by Hyundai Motor America and Kia America for over 3.3 million vehicles due to a fire risk, according to the National Highway Traffic Safety Administration.
Meanwhile, Tesla Chief Executive Elon Musk is warning that the demands of the United Auto Workers (UAW) could potentially push Ford, General Motors, and Chrysler owner Stellantis into bankruptcy. Musk's comments come as he appears to criticize President Joe Biden for supporting the picket line. As a result, shares of GM and Ford have slipped, while the UAW has announced plans to expand strikes on Friday.
