THE WEEK ON WALL STREET
Stocks extended their August declines last week as higher yields and weak economic data out of China soured investor sentiment.
The Dow Jones Industrial Average lost 2.21%, while the Standard & Poor’s 500 retreated 2.11%. The Nasdaq Composite index backtracked 2.59% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, slumped 2.83%.1,2,3
Rising bond yields, driven primarily by strong economic data and the release of the minutes from July’s Federal Open Market Committee (FOMC) meeting that pointed toward Fed officials’ potential need to raise rates further, weighed on stocks throughout the week.
In a week of light trading typical of August, stocks were additionally buffeted by a string of economic data that painted a flailing economic recovery in China and warnings of potential downgrades of dozens of U.S. banks by Fitch, a credit-rating agency.
After the 10-year Treasury yield rose to its highest level since October 2022 on Thursday, yields eased on Friday, helping to arrest the week’s downward trend.4
1. The Wall Street Journal, August 18, 2023
2. The Wall Street Journal, August 18, 2023
3. The Wall Street Journal, August 18, 2023
4. CNBC, August 18, 2023