Weekly Market Update

Stocks fell last week as soft economic data rattled investors focused on the Fed’s next move with interest rates.

The Dow Jones Industrial Average lost 2.93 percent, while the Standard & Poor’s 500 Index dropped 4.25 percent. The tech-heavy Nasdaq Composite fell 5.77 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, declined 2.91 percent.^1,2

Economic Data Unsettles Investors

The four-day trading week got off to a rough start as weak manufacturing data reawakened recessionary fears. All three major averages were down for the first session after the Labor Day holiday. For many, it was reminiscent of August 5, when stocks tumbled as recession worries unsettled investors.³

Attention shifted to Friday’s jobs report as stocks traded narrowly. Markets initially reacted positively to news that job growth rebounded slightly and unemployment ticked down. However, selling pressure increased as the trading session progressed, and investors digested the underlying data. The S&P 500 had its worst week since March 2023.⁴

Focus on Fed’s September Meeting

The Federal Reserve seems poised to make a tough decision regarding monetary policy in its September meeting. The jobs market and other softening economic data have quickly overshadowed concerns about inflation.

However, there’s still a case to be made for a soft landing.

Job growth in August was slower than expected, but 142,000 jobs were created–an uptick that some would argue is an overall positive despite missing expectations. The drop in the unemployment rate to 4.2 percent bolstered the soft-landing narrative.⁵

Market observers anticipate a 0.25 percent rate adjustment in September, but some contend that the Fed may consider a more significant move. On Friday, Fed Governor Christopher Waller said he was open to a larger move if necessary. Chicago Fed President Austan Goolsbee and New York Fed President John Williams commented similarly during the week.^6,7

This Week: Key Economic Data

Monday: Wholesale Inventories. Consumer Credit.

Wednesday: Consumer Price Index (CPI). EIA Petroleum Status Report.

Thursday: Producer Price Index (PPI). Jobless Claims (weekly).

Friday: Consumer Sentiment. Import and Export Prices.

_{Source: Investors Business Daily - Econoday economic calendar; September 6, 2024
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.}

This Week: Companies Reporting Earnings

Monday: Oracle Corporation (ORCL)

Tuesday: GameStop Corp. (GME)

Thursday: Adobe Inc. (ADBE)

_{Source: Zacks, September 6, 2024
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.}