US equities end lower as valuation concerns creep in

Market Overview - Investors are assessing the potential for rate cuts from the central bank to support a weakening labor market without triggering inflation [1][7] - The three major indexes and the small-cap Russell 2000 reached record highs simultaneously for the first time in years [1][7] - Federal Reserve Chair Jerome Powell indicated that asset prices appear highly valued, suggesting caution in future policy decisions [1][2] Valuation Insights - Analysts noted that current S&P pricing reflects 23-24 times expected earnings, with a projected 15% annualized earnings growth over the next five years, which is considered high [2][8] - Some valuation measures for stocks are at their highest levels since 2021, with potential further increases reaching thresholds not seen since the internet boom [5][8] Sector Performance - The materials sector was the worst performer in the S&P 500, declining by 1.6%, with Freeport-McMoRan's stock plunging 17% due to a force majeure declaration at its Grasberg mine [5][8] - Conversely, the S&P 500 energy index rose by 1.2%, benefiting from higher crude prices, which reached a seven-week high following a surprise drop in U.S. crude inventories [8] Company News - Sales of newly constructed single-family homes in the U.S. unexpectedly surged by 20.5% in August [5][8] - Lithium Americas' shares nearly doubled to close at $6.01 after reports of potential government equity stake discussions [8] - Ongoing talks for a government loan exceeding $2.26 billion for Lithium Americas' Thacker Pass lithium project with General Motors, which saw a 2.3% stock increase [5][8] - Micron Technology's stock fell by 2.8% following its quarterly results [5][8] - Oracle's stock declined by 1.7% amid news of plans to raise $15 billion in corporate bond sales [8] Market Activity - Declining issues outnumbered advancers on both the NYSE and Nasdaq, with ratios of 1.88-to-1 and 1.35-to-1, respectively [6][8] - The S&P 500 recorded 21 new 52-week highs and 10 new lows, while the Nasdaq Composite saw 85 new highs and 55 new lows [6][8] - Trading volume on U.S. exchanges was 18.04 billion shares, slightly above the 17.75 billion average over the last 20 trading days [7][8]