2023-09-15 23:53:59
A second week of losses for US stocks… and the Federal Reserve’s decision within days
US stocks continued to decline for the second week in a row, a few days before the Federal Reserve’s decision expected to be announced next Wednesday, following which the bank president’s words are expected to be a guide to investors regarding interest rate expectations during the coming period.
By the end of trading on the last day of the week, the Dow Jones Industrial Average lost 291 points, representing 0.8% of its value at the beginning of Friday trading, and erased almost all of the gains it achieved on Thursday. The S&P 500 index lost 1.2%, while declines in the Nasdaq index reached… Rate of 1.6%.
Technology stocks led the decline on Friday, with increasing possibilities for the Federal Reserve to keep interest rates at their highs for periods beyond what was previously expected. The S&P Technology Index lost nearly 2%, following Adobe fell by 4%, despite its announcement on Thursday evening that it had exceeded profitability expectations during the fourth quarter.
Despite the start of the strike organized by the Automobile Workers Union on Friday, shares of the auto companies General Motors and Stellantis rose, while Ford shares were almost flat.
Thousands of UAW members went on strike following failing to reach an agreement with automakers Thursday evening.
In Europe, stocks rose at the end of the week’s trading, as investor sentiment improved following Chinese data showed that industrial production rose in August by 4.5% on an annual basis, compared to the July reading, which stopped at 3.7%. Also, retail sales increased by 4.6% year-on-year, which is higher than expectations for a rise of only 3%.
The STOXX 600 index ended Friday trading up 0.2%, with most major sectors and markets rising in positive territory. Household goods led the gains, rising 1.4%, while luxury stocks got the most support from Chinese retail sales figures.
The European index rose 1.5% on Thursday, in what was its best session since the beginning of June.
The European Central Bank raised interest rates by 25 basis points on Thursday, the tenth rise in a row that took the key interest rate to a record level of 4%. Experts have revised downward economic growth forecasts for the eurozone.
The markets drew support from the European Central Bank’s statements on Thursday, in which it indicated that the bank’s key interest rates had reached levels that, if maintained for a sufficient period, would make a significant contribution to the timely return of inflation to its target level of 2%.
Relatedly, oil prices rose to their highest levels in ten months on Friday, recording a third weekly gain in a row, supported by scarcity of supplies due to Saudi and Russian production cuts, in addition to optimism regarding increasing Chinese demand for crude.
Brent crude futures rose 23 cents, or 0.3%, with the settlement price set at $93.93 per barrel, while US West Texas crude futures rose 61 cents, or 0.7%, to close at $90.77 per barrel.
Both contracts traded at their highest levels in 10 months on Tuesday for the fifth straight session, gaining regarding 4% on a weekly basis.
Analysts at Bank of America and other institutions indicated that they expect oil prices to soon rise to more than triple figures ($100 or more), perhaps before the end of this year.
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