Global Market Updates: The US stock market saw a dramatic correction on Friday, with all three major benchmark indices, the Nasdaq, Dow Jones, and S&P 500, falling significantly. The Dow Jones Index fell 0.83 percent, the S&P 500 fell 1.22 percent, and the Nasdaq Composite fell 1.56 percent. The S&P 500 and Nasdaq reversed their weekly gains, while the Dow finished the week marginally up.
The focus is on the US Federal Reserve meeting.
There’s a tug of war between those who think inflation and interest rates are going to come down and the Fed will start cutting rates next year and those who believe that inflation is going to stay well above the Fed target for a while, so rates will stay higher for longer, said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana, pointing to the US Fed meeting as the cause of this sharp fall on Wall Street. – Global Market Updates
Sugandha Sachdeva, Executive Director & Chief Strategist at Acme Investment Advisors, commented on the US Federal Reserve interest rate rumor by saying, “There is a growing conviction that the US Federal Reserve will execute another interest rate hike by the end of this year.
Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut, said that if there is a pause in September and November, it might result in a big year-end rally and reinforce the idea that the Fed’s next action would be a rate decrease in 2024.
Treasury yields increased ahead of the Federal Reserve policy meeting the following week as concerns that high-interest rates might persist longer than anticipated caused the two-year yield to nudge past the 5% mark.
As they closed higher, European stocks posted a weekly gain, continuing a rise that was sparked by the European Bank’s signal that its rate-hiking cycle was coming to an end.
The global MSCI stock index fell by 0.63% while the pan-European STOXX 600 index increased by 0.23%.
Emerging Market:
Stocks increased by 0.33%. While Japan’s Nikkei gained 1.10%, MSCI’s largest index of Asia-Pacific shares outside of Japan ended the day 0.58% higher.
