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Geopolitical concerns, tough talk from Fed officials, and a rise in long-term bond yields to 16-year highs appeared to weigh on sentiment and drove the S&P 500 Index to its biggest weekly decline in a month. The Nasdaq fared worst among the major benchmarks and nearly moved back into bear market territory, ending the week 19.9% below its early-2022. Growth stocks lagged their value counterparts. Europe, Japan and China equities dropped sharply over the week. Stocks started the week on a strong note helped by limited negative news flow regarding the Middle East over the weekend. Deepening tensions later in the week appeared to drain the gains, however.

The major US equity indexes ended mixed as investors weighed inflation data against dovish signals from Fed officials. Large-cap value stocks outperformed, helped by earnings beats from Citigroup, Wells Fargo, and JPMorgan Chase. The banking giants kicked off the unofficial start to Q3 earnings reporting season. The prospect of a widening war in the Middle East boosted energy shares and defense stocks while weighing on airlines and cruise operators. Investors’ sentiment appeared to get a boost at the start of the week, after Fed Vice Chair Philip Jefferson told an economics conference in Dallas that he was mindful that the rise in long-term bond yields might affect the need for future rate hikes.

The major US equity indexes closed mixed with a 1.6% weekly gain for the Nasdaq and a -0.3% decline for the Dow as Large-cap growth stocks sharply outperformed value and small-caps. An equally weighted version of the S&P 500 Index lagged its market-weighted counterpart by the largest margin since March. Similarly, the S&P 500 outperformed the small-cap Russell 2000 Index by the widest margin over the same period. The most important macro data of the week was the US payroll report on Friday. Employers added 336,000 nonfarm jobs in September, roughly double consensus estimates. The details in the jobs report offered a more nuanced picture, however, which appeared to foster a market rebound.

The worst month for S&P & Nasdaq since Dec 2022. Higher oil prices, higher yield and the increasing likelihood of a U.S. government shutdown continue to weigh on investors’ sentiment. The yield on the 10-year U.S. Treasury note peaked above 4.6% on Wednesday. However, yields ticked modestly lower after the release of encouraging eurozone and U.S. inflation data. The S&P 500 Index suffered a fourth consecutive weekly pullback. Within the index, utilities lost the most ground. Energy stocks, on the other hand, outperformed.

The Fed held its September meeting and the message from Jay Powell was clear: they will continue to keep rates elevated until inflation moves more convincingly toward 2.0%. The Fed held rates steady at 5.25% - 5.5% at this meeting but kept the option of an additional rate hike on the table, maintaining its outlook for a peak fed funds rate of 5.6%. The S&P 500 and the technology-heavy Nasdaq Composite reacted negatively, dropping 2.9% and 3.6% respectively. That marked the third straight negative week and worst weekly performance since March for each. As Vanda Research notes, inflows into the artificial intelligence (AI) sector continue to decline.

US stocks had a mixed week, with value stocks leading the market as U.S. WTI oil prices rose above $90 per barrel for the 1st time since November 2022. Tech and growth stocks lagged after Apple’s new product introduction event on Tuesday that featured a price increase on its top-of-the-line iPhone 15. However, broad market sentiment received a boost from the largest IPO of 2023 as shares of Arm started trading on the Nasdaq on Thursday. Wednesday’s release of the August CPI data showed that the Fed has made progress in its fight against inflation, but rising energy prices may prompt the central bank to further tighten monetary policy. The headline CPI numbers showed the largest monthly increase since August 2022, due to the effect of higher gasoline prices.

Stocks closed lower over the holiday-shortened week as positive economic data drove an increase in bond yields. Growth stocks and large-caps outperformed value and small-caps. Apple was one of the main negative performance contributors after news that Chinese government employees would no longer be able to use iPhones. Declines in NVIDIA and other chipmakers also weighed on the indexes. Macroeconomic data surprised on the upside. E.g the ISM report on August services sector activity jumped unexpectedly to its highest level since February. Meanwhile, Thursday’s weekly jobless claims report came in lower than expected; the number of Americans applying for unemployment in the previous week fell to 216,000, the lowest level in six months.

Signs that the US jobs market is cooling down helped the major US equity indices to register solid gains for the week, although stocks closed out their first negative month since February. A decrease in bond yields over much of the week provided a boost to growth shares. Smaller-cap stocks outperformed. Indeed, bad news for the economy was considered good news for stock prices, given the interest rate implications. On Tuesday, the S&P 500 Index recorded its best one-day gain since June, following news that job openings unexpectedly fell by 338,000 in July and hit their lowest level since March 2001

The main US equity indices were mixed with the #Nasdaq outperforming (along with the S&P 500) while The Dow ended lower on the week. Growth #stocks handily outperformed value shares, helped by another substantial #earnings and revenue beat by artificial intelligence chipmaker #NVIDIA. Financials pulled back early in the week after S&P Global downgraded its credit ratings of five regional banks. Several retailers reported 2Q results, which arguably offered a generally cautious picture on the health of the U.S. consumer. On the macro side, disappointing data dominated the week with the Citi macro surprise index tumbling most since April.

US stocks retreated for a third consecutive week as sentiment appeared to take a blow from a sharp increase in longer-term bond yields and fears of a sharp slowdown in China. The S&P 500 index ended the week down 5.2% from its July 26 intraday peak. Small-cap stocks performed the worst. On the macro side, July US retail sales jumped 0.7% over the month, roughly double consensus estimates. Sales in specific categories indicated a sharp rise in discretionary spending (e,g +11.9% yoy for restaurants and bars).

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