THE WEEK ON WALL STREET
Concerns that the Fed may raise interest rates soured investor sentiment, sending stocks lower in a holiday-shortened trading week.
The Dow Jones Industrial Average slipped 0.75%, while the Standard & Poor’s 500 declined 1.29%. The Nasdaq Composite index dropped 1.93% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, lost 1.28%.1,2,3
STOCKS RESUME THEIR DECLINE
Stocks were bedeviled by rising bond yields and higher oil prices last week, with technology shares bearing the brunt of the decline. Hopes that the Fed may not find it necessary to raise interest rates were dented by economic data reflecting higher prices, rising labor costs, and fewer-than-forecast initial jobless claims.
The inflationary implications of higher oil prices also contributed to the growing sense that the Fed may implement additional rate hikes. While bond traders generally still expect no rate hike in September, the likelihood of a 0.25% rate hike or higher in November jumped to 43.3% by Friday morning from 35.4% a week ago.4
1. The Wall Street Journal, September 8, 2023
2. The Wall Street Journal, September 8, 2023
3. The Wall Street Journal, September 8, 2023
4. CME Group, September 8, 2023