On the last trading day of August, Wall Street lost some of its early enthusiasm and the dollar rose as investors shifted their attention to Friday’s important jobs report and the widely anticipated inflation data failed to provide many shocks.
The Three Major Indexes : US stocks
The S&P 500 followed the Dow in the red, but the tech-heavy Nasdaq finished marginally higher. The S&P 500 had its greatest percentage down since February, while the Nasdaq, which is heavily weighted in technology, saw its steepest decline of the year. All three indexes reported losses for the month.
According to Joseph Seroka, chief investment officer of Nova Point in Atlanta, “in August, a little bit of enthusiasm surrounding AI and the big tech names has been digested.” Investors are seeking a theme that extends support beyond the major seven equities that accounted for the majority of gains for the year.
PCE Price Index
The closely watched Personal Consumption Expenditures (PCE) price index from the Commerce Department, the Fed’s preferred inflation yardstick, came in right on target among a smattering of U.S. economic reports, allaying concerns about an upside surprise that might have helped prompt yet another interest rate hike in September.
Seroka said, “The PCE data came in consistent with most expectations, and now we have tomorrow’s employment report as well as the CPI and PPI on the way to the next Fed meeting.” “The Fed has truly been lacking the employment puzzle piece. According to the Fed, in order to reduce wage pressure, unemployment must increase and there must be greater slack in the labour market. And we haven’t yet witnessed that.
Overall Status of the Us Stock’s Market
The S&P 500 (.SPX) dropped 7.21 points, or 0.16%, to 4,507.66, the Dow Jones Industrial Average (.DJI) dropped 168.33 points, or 0.48%, to 34,721.91, and the Nasdaq Composite (.IXIC) gained 15.66 points, or 0.11%, to 14,034.97.
As dropping consumer goods and luxury equities countered rising banking and real estate companies, European shares reversed earlier advances to end lower. Both the global MSCI stock index (.MIWD00000PUS) and the pan-European STOXX 600 index (.STOXX) saw losses.
Greenback Advances
Stocks in emerging markets fell by 0.84%. While Japan’s Nikkei (.N225) surged 0.88%, MSCI’s broadest index of Asia-Pacific equities outside of Japan (.MIAPJ0000PUS) finished 0.38% down.
Following U.S. economic statistics, the dollar strengthened versus a basket of other currencies, while the euro declined as a result of cautionary remarks made by a prominent hawk at the European Central Bank.
The euro fell 0.74% to $1.0843 while the dollar index (.DXY) increased by 0.42%. At 145.50 per dollar, the Japanese yen gained 0.53% against the US dollar, while sterling was last down 0.39% on the day at $1.2669.
U.S. Bonds
After data confirmed expectations that the Fed will maintain interest rates constant in September, U.S. Treasury yields declined in volatile trade. The yield on benchmark 10-year notes recently increased by 5/32 to 4.0984% from 4.118% late on Wednesday. The 30-year bond’s price recently increased 14/32 to increase its yield from 4.228% late on Wednesday to 4.2023%.
Commodity Stock Market Changes
Oil prices increased as a result of a reduction in U.S. inventories and production curbs by the OPEC+ group of oil-producing countries. U.S. crude increased by 2.45% to conclude at $83.63 a barrel, while Brent increased by 1.16% to close at $86.86 per barrel. Following the release of the PCE data, gold prices declined somewhat relative to the dollar. Gold’s spot price fell 0.1% to $1,939.84 per ounce.
Bottom Line
According to Refinitiv data, Investors are anticipating the release of the August employment data on Friday morning, which will help inform the Fed’s upcoming change in monetary policy. According to Refinitiv data, economists anticipate the creation of 170,000 new jobs and the maintenance of the 3.5% unemployment rate this month.
The stock market lost money in August, although it narrowed its worst losses since the middle of the month. The S&P 500 lost 1% towards the end of the month. In August, the Dow and Nasdaq Composite fell by around 2%.