Wall Street started the day with a slight rebound, but remains on track for weekly losses following a sell-off fueled by the Federal Reserve’s guidance of prolonged high interest rates.
At the opening bell, the S&P 500 (^GSPC) saw a modest gain of around 0.2%, while the Dow Jones Industrial Average (^DJI) was flat. The Nasdaq Composite (^IXIC) showed a more notable rise of approximately 0.5%, attempting to recover from the previous session’s significant drop.
Investor sentiment turned cautious as they assessed the potential impact on consumer and business demand due to the Federal Reserve’s commitment to maintaining higher borrowing costs to curb inflation. Jerome Powell, chairman of the central bank, offered few assurances about whether an economic recession will be avoided.
Stocks now appear to be stabilizing, with the S&P 500 poised for a rebound after experiencing its most challenging day since March. Meanwhile, the 10-year Treasury yield stabilized after hitting its highest level in more than 15 years on Thursday.
S&P Global’s subsequent updates on US manufacturing and services activity for September are expected to fuel the ongoing debate over whether the Federal Reserve can achieve a “soft landing” for the economy.
As for global central banks, the Bank of Japan opted to keep its ultra-low interest rates on Friday, reaffirming its commitment to supporting the economy. This does not suggest any imminent changes to his extensive stimulus program. Consequently, the yen weakened against the dollar following the decision.
On the individual stock front, Activision Blizzard (ATVI) saw a rally in shares, approaching Microsoft’s (MSFT) offering price. This follows an announcement by the UK antitrust regulator that the door is open for the $69 billion acquisition to go ahead.
In addition, attention remains focused on the strikes that affect both the automotive sector and Hollywood. The UAW has threatened to escalate strikes in its ongoing strike against GM (GM), Ford (F), and Jeep parent Stellantis (STLA), with a Friday deadline. Despite extensive negotiations, the big four studios – Warner Bros. Discovery (WBD), Disney (DIS), Netflix (NFLX) and NBCUniversal – failed to reach an agreement with the striking writers.
Stock Futures at a Glance:
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Dow Jones Industrial Average (^DJI) Futures: +0.12% (42 points)
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S&P 500 Futures (^GSPC): +0.27%
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Nasdaq 100 Futures: -0.49%
Mixed open for stocks as Wall Street faces weekly losses
On Friday morning, investors steered stocks in opposite directions as major indexes were on track for weekly losses. This trend comes as Wall Street grapples with the Federal Reserve’s moves to maintain higher interest rates for an extended period.
The S&P 500 (^GSPC) saw a marginal increase of 0.1%, while the Dow Jones Industrial Average (^DJI) saw a slight drop of 0.1%, equivalent to 56 points. Meanwhile, the tech-focused Nasdaq Composite (^IXIC) saw an increase of about 0.5%.
This story is evolving. Stay tuned for more updates and information on the stock market…
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