US Stocks Sink as Major Indexes Fail to Build on Thursday Rally
Overview
US stocks sank on Friday as the major indexes failed early on to build on a Thursday rally and were in danger of giving up the week’s gains.
Stock Performance
- The S&P 500 (^GSPC) was down 0.9%
- The Dow Jones Industrial Average (^DJI) slumped by 0.5%
- The tech-heavy Nasdaq Composite (^IXIC) plunged 1.4%
Factors Influencing the Market
The moves on Friday came as China reported that its economy picked up steam last month, easing concerns about the world’s second-largest economy. In the US, the United Auto Workers union officially launched a historic strike at select Big Three automaker plants.
Resilience in the US Consumer
The Wall Street benchmarks rallied on Thursday, after retail sales and wholesale price inflation for August came in hotter than expected. Those signs of resilience in the US consumer and of persistent price pressures make a case for more Fed rate hikes. The central bank will meet next week as 97% of bets are currently on the committee holding interest rates at current levels.
Inflation Expectations
New data on Friday painted a better picture for the Fed, with the University of Michigan’s consumer survey showing that consumers’ short-term inflation expectations had moved down to lows not seen in more than two years.
Impact of Oil Prices
A recent oil price rally has spurred the rises in inflation, with a significant effect on stocks. On Friday, WTI crude (CL=F) and Brent (BZ=F) futures took a slight break in the rally but stayed near the 2023 highs hit on Thursday.
Individual Stock Moves
In individual stock moves, all eyes continued to be on British chipmaker Arm, which debuted on public markets on Thursday with a near-25% rise. Arm stock was up a more modest 1% on Friday.
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