China started the week with a negative performance, while the Nikkei in Japan remained closed on Monday, September 18, for a holiday. In the morning, the Hang Seng recorded a loss of 1.10%, while Shanghai remained below parity.
In the energy market, the price of U.S. WTI crude oil rose by 0.75%, reaching $91.48 per barrel. This marks a significant 30% increase in the last three months.
Meanwhile, Wall Street futures show a slight upward trend, averaging 0.15% in a week during which the Federal Reserve will decide on interest rate policies. The market anticipates a possible pause in the September meeting. Additionally, Friday will be the Bank of Japan’s turn for its economic decisions.
On Friday, stock markets saw a negative close: the Dow Jones Industrial Average index dropped by 288.87 points, or 0.83%, closing at 34,618.24, the S&P 500 fell by 1.22% to 4,450.32, and the Nasdaq Composite recorded a decline of 1.56% to 13,708.33.
The Dow Jones ended the week with a modest gain of 0.12%. However, the S&P 500 and the Nasdaq Composite experienced their second consecutive week of losses, with declines of 0.16% and 0.39%, respectively.
During the trading day, the technology sector recorded one of the weakest performances within the S&P 500, marking a nearly 2% decline. A notable point was the performance of Adobe’s stock, which dropped by over 4% the day after reporting quarterly results that exceeded expectations.
At the same time, shares of Arm Holdings experienced a 4.2% decline immediately after a successful public debut. This fluctuation could be attributed to various factors, including investor selling pressure or typical changes associated with events like IPOs.
In a different context, General Motors and Stellantis NV automotive stocks saw gains on Friday, while Ford experienced a slight decline. It’s important to note that thousands of United Auto Workers members went on strike following a breakdown in negotiations with automakers on Thursday evening.
Wall Street is carefully evaluating a series of conflicting economic data ahead of the Federal Reserve’s policy decision scheduled for September 20. Despite forecasts indicating that the central bank will keep interest rates unchanged at the upcoming meeting, market participants are eager to understand the Fed’s perspective on inflation. Inflation has been a significant concern for financial markets and economists lately. A higher inflation rate could influence the Fed’s decisions on interest rate policies, including potential increases. The Fed is trying to balance economic stimulus with inflation control, and its stance on this front will be crucial for future financial market dynamics.
While the Federal Reserve will likely keep rates steady in the September meeting, the European Central Bank implemented an expected quarter-point rate hike on Thursday. However, the ECB noted a moderation in inflation and suggested the forthcoming conclusion of its rate-hiking campaign. In the United States, the CME FedWatch Tool indicates a 97% probability of unchanged rates based on Fed funds futures prices in the coming week. Investors closely monitor these developments to assess their impact on financial markets and the global economy.
Last week, investors digested economic reports showing moderate inflation and consumer resilience.
The August Producer Price Index (PPI) highlighted control over core inflation, with a 0.2% increase in the core PPI, excluding food and energy, in line with economists’ expectations surveyed by Dow Jones. However, the overall number showed a 0.7% increase, surpassing the 0.4% forecast.
This comes after the August Consumer Price Index (CPI), released on Wednesday, revealed a slight beat in monthly core CPI, which excludes food and energy. August retail sales exceeded expectations, with a 0.6% increase compared to the economists’ forecast of 0.1%. Excluding the automotive sector, retail sales increased by 0.6% last month, surpassing the expected 0.4% increase.
These data suggest that, despite some fluctuations, core inflation remains relatively stable while consumers continue to support economic growth with strong retail sales results. Investors are closely watching these developments to assess the future trends of financial markets.
Friday, September 15, 2023, Market Indexes:
Dow Jones -0.83% at 34,618.24
S&P 500 -1.22% at 4,450.32
NASDAQ Composite -1.56% at 13,708.34