S&P 500 Ends Lower as Fed Cuts Rates, ResMed Shares Tumble

Key Takeaways

• The S&P 500 ended 0.3% lower on Wednesday, Sept. 18, as the Federal Reserve announced its first interest-rate cut since March 2020.
• ResMed shares tumbled after analysts said the likely label expansion of popular weight-loss drugs to treat sleep apnea could hurt demand for the company’s devices.
• General Motors stock increased as the carmaker introduced adapters allowing drivers to power up GM EVs using Tesla’s charging station network.

Major U.S. equities indexes ended lower on Wednesday after the Federal Reserve reduced its benchmark interest rate by half a percentage point. Central bank policymakers opted for an aggressive rate cut as the focus shifts toward economic growth and the employment market following a multi-year campaign to fight inflation.

ResMed Shares Tumble on Analyst Downgrade

Shares of medical device maker ResMed dropped 5.1%, the steepest decline of any S&P 500 constituent after the investment analysis firm Wolfe Research downgraded the stock to “underperform.” With the Food and Drug Administration (FDA) likely to approve Eli Lilly’s blockbuster weight-loss drug Zepbound for the treatment of sleep apnea, analysts expect a disruption in demand for ResMed’s devices that treat the condition. Wolfe pointed to a survey showing that half of doctors expect to prescribe fewer sleep apnea devices as patients gain access to Zepbound and other GLP-1 medications.

Avery Dennison Falls on Investor Day

Shares of Avery Dennison, which provides labeling and packaging solutions as well as radiofrequency identification (RFID) tags for various markets, fell 4.9% as the company hosted its 2024 Investor Day. While the company expects the key mega-trends of digitization, sustainability, and personalization to underpin demand for its intelligent labels and other products, Avery Dennison remains sensitive to the availability and pricing of raw materials. Inventory destocking has also weighed on the company’s performance, although the issue has shown signs of improving in 2024.

Sysco CEO Highlights Softening Restaurant Industry

Addressing a conference on the consumer and retail markets, the chief executive officer (CEO) of wholesale food distributor Sysco said global restaurant industry traffic was down around 3% in the recent quarter and is softening further in the current quarter. Although the executive stressed that the company remains confident in its full-year guidance, Sysco shares slid 4.2% on Wednesday.

West Pharmaceutical Services Sees Stock Jump

West Pharmaceutical Services shares notched the top performance in the S&P 500 on Wednesday, jumping 4.5%. In its most recent earnings report, released in July, the supplier of packaging and delivery solutions for injectable drugs reduced its full-year sales and profit outlook, noting reduced demand from biotech customers as they work through existing inventories. However, the company did predict a potential return to organic revenue growth in the fourth quarter, suggesting the destocking headwinds could abate.

Dollar Tree Adds 3% Amid Store-Opening Targets

Shares of the discount retailer Dollar Tree added 3.0% on the day. The stock has been under pressure in 2024 as the company navigates a restrained consumer spending environment and considers strategic options for its struggling Family Dollar segment. However, a Wednesday report in The Wall Street Journal highlighted how Dollar Tree and fellow dollar-store chain Dollar General are pursuing aggressive store-opening targets despite the challenging environment, reflecting confidence that new locations can drive sales growth and market share gains.

General Motors Introduces Adapters for EV Charging

General Motors shares gained 2.4% after the carmaker said it will offer adapters that allow owners of its electric vehicles (EVs) to access the network of charging stations operated by Tesla. Drivers of GM EVs will be able to purchase an adapter for $225 through the carmaker’s mobile apps. In other positive news for GM, the company struck a tentative deal with workers at an EV and battery plant in Ontario, Canada, reducing the chance of a work stoppage at the facility.

Overall, the S&P 500 ended lower as the Federal Reserve’s interest rate cut raised concerns about economic growth. ResMed shares tumbled due to potential competition from weight-loss drugs for sleep apnea treatment. Avery Dennison faced challenges related to raw material availability and inventory destocking. Sysco highlighted a softening restaurant industry, while West Pharmaceutical Services saw a stock jump despite reduced demand. Dollar Tree added 3% amid aggressive store-opening targets, and General Motors introduced adapters for EV charging, boosting its stock. Investors will continue to monitor these developments and their impact on the market.