On Friday, Wall Street experienced a widespread decline in stocks, resulting in the S&P 500 recording its second consecutive weekly loss. The benchmark index fell 1.2 percent, with the Dow Jones dropping 0.8 percent and the Nasdaq composite giving back 1.6 percent. Additionally, the Australian share market is expected to open lower, with futures pointing to a 0.6 percent decline.
Despite this overall decline, US automaker stocks displayed resilience after members of the United Auto Workers union went on strike at multiple plants overnight. Ford slipped 0.1 percent, while General Motors saw a 0.9 percent increase. Stellantis shares gained 1.9 percent in trading on the Milan Stock Exchange in Italy.
Earlier in the week, the market had shown gains following positive economic indicators. The Federal Reserve’s interest rate policy meeting next week has been a focus for Wall Street, with expectations that the central bank will maintain interest rates at current levels. Reports of higher-than-expected spending by US shoppers at retailers and a decrease in the number of workers filing for unemployment benefits added to market sentiment. However, a report on wholesale prices rising more than anticipated signaled potential concerns regarding inflation.
A survey from the University of Michigan revealed a slight decline in consumer sentiment for September, although overall sentiment remains strong. However, consumers reduced their expectations for inflation in the year ahead to 3.1 percent, the lowest reading since March 2021.
The market’s attention remains fixed on factors that could impact Federal Reserve activity. The central bank has recently taken measures to control inflation, but inflation levels have been easing towards the target rate of 2 percent. Oil prices, driven by high gasoline prices, have been a significant contributor to inflation concerns.
Investors are largely predicting that the Federal Reserve will maintain interest rates at the upcoming meeting and possibly for the remainder of the year. However, the central bank has expressed its willingness to raise rates again if necessary to combat inflation.
Technology stocks, particularly Microsoft and Nvidia, were the primary drag on the S&P 500, with both experiencing declines. Retailers such as Amazon, Home Depot, and Lowe’s also weighed down the index.
In summary, Wall Street ended the week with a broad slide in stocks, resulting in the S&P 500 posting its second consecutive loss. The market has been closely monitoring economic indicators ahead of the Federal Reserve’s upcoming interest rate policy meeting. Investor sentiment has been impacted by reports of higher-than-expected consumer spending, decreasing unemployment benefit filings, and rising wholesale prices. However, concerns about inflation persist, particularly regarding rising gasoline prices.