Last Updated: 4:05 PM EST
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Stock indices finished today’s trading session mixed following hawkish comments from the Federal Reserve (see previous update). The S&P 500 (SPX) and the Dow Jones Industrial Average (DJIA) fell 0.23% and 0.31%, respectively. On the other hand, the Nasdaq 100 (NDX) gained a fractional 0.05%.
The consumer discretionary sector (XLY) was the session’s laggard, as it fell 0.98%. Conversely, the technology sector (XLK) was the session’s leader, with a gain of 0.19%.
Furthermore, the U.S. 10-Year Treasury yield decreased to 4.43% while the Two-Year Treasury yield also slipped, as it hovers around 5.11%.
Last updated: 2:45PM EST
Stock indices are mixed at the time of writing amid hawkish fedspeak. Indeed, the U.S. Federal Reserve may need to consider further rate hikes as the battle against inflation continues, according to Boston Fed President Susan Collins. Speaking to the Maine Bankers Association, Collins stressed that while recent inflation data is encouraging, more time is needed to ensure it’s on a sustainable path back to the 2% target. She supported the projections, which signaled another rate increase this year and fewer cuts than initially expected.
Echoing this sentiment, Fed Governor Michelle Bowman stated that rates might have to increase due to still-elevated inflation, particularly with potential spikes in energy prices. Despite recent interest rate holds in the 5.25%-5.50% target range, projections indicate inflation may remain above 2% until at least 2025.
Furthermore, Mary Daly, President of the Federal Reserve Bank of San Francisco, acknowledged the significant decrease in inflation but cautioned against premature celebration. While advocating for a patient strategy, Daly also noted that credit card debt and short-run inflation expectations warrant monitoring. While Daly remains against changing the Fed’s inflation goal to 3%, she does highlight the ongoing challenges of meeting the 2% inflation target by 2024.
Last updated: 12:05M EST
Stocks are in the green so far in today’s trading. Earlier today, Markit released its preliminary monthly report for the U.S. Services Purchasing Managers’ Index, which measures the activity levels of purchasing managers in the service sector. A number over 50 represents an expansion, whereas anything below 50 means a contraction. The report came in at 50.2, which was lower than the expected 50.6.
It’s worth noting that this indicator is lower than last month’s reading of 50.5 and has been in an overall downtrend ever since its peak in June 2021, when it hit a high of 70.4.
Markit also released its preliminary monthly report for the U.S. Manufacturing Purchasing Managers’ Index, which measures the activity levels of purchasing managers in the manufacturing sector. The report came in at 48.9, which was higher than the expected 48. Nevertheless, this still indicates a contraction.
Furthermore, it’s worth mentioning that this indicator has been in an overall downtrend ever since its peak in August 2021, when it hit a high of 63.4.
Last updated: 9:30AM EST
Stocks opened higher on Friday, with the Nasdaq 100 (NDX) and the S&P 500 (SPX) up by 0.23% and 0.16%, while the Dow Jones Industrial Average (DJIA) ticked lower by 0.01%, respectively, at 9:40 a.m. EST, September 22.
First published: 4:10AM EST
U.S. stock futures trended higher on Friday morning after the three major indices ended Thursday on a dismal note in reaction to the Federal Reserve’s interest rates decision. Futures on the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) were up by 0.26%, 0.08%, and 0.01%, respectively, at 4:10 a.m. EST, September 22.
The Fed’s decision to raise interest rates one more time by the end of this year and make fewer cuts next year is expected to put pressure on risky assets like equities, with interest rates staying higher for a longer period than anticipated.
The thought of an extended period of elevated interest rates spooked investors, with the Dow declining more than 370 points on Thursday and the tech-heavy Nasdaq 100 falling over 1.8%. The S&P 500 Index was down 1.64%.
Aside from pressure from high interest rates, stocks are getting impacted by other unfavorable developments, including the UAW strike, the spike in treasury yields, a potential government shutdown, and an increase in crude oil prices.
Meanwhile, coming to key news, Cisco (NASDAQ:CSCO) made headlines yesterday after announcing that it is acquiring cybersecurity company Splunk (NASDAQ:SPLK) for $28 billion. The deal would mark the largest-ever-acquisition for the tech giant.
Elsewhere, European markets were down as of writing following interest rate decisions announced by central banks of several countries on Thursday. Bank of England and the Swiss National Bank kept rates unchanged but cautioned about further rate hikes and the need to keep interest rates high enough for long to tame inflation. In contrast, the central banks of Sweden and Norway raised their interest rates.
Asia-Pacific Markets End Mixed on Friday
Asia-Pacific indices were mixed on Friday, with the Bank of Japan leaving interest rates unchanged. The central bank maintained ultra-low interest rates and said that it will continue with monetary easing, given the “extremely high uncertainties surrounding economies and financial markets at home and abroad.”
Japan’s Nikkei and Topix indices fell by 0.52% and 0.30%, respectively.
Meanwhile, Hong Kong’s Hang Seng index and China’s Shanghai Composite and Shenzhen Component indices gained 2.28%, 1.55%, and 1.97%, respectively.
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