FOMC To Pause Rates Hike Next Week? 🤗

Thanks to Tiger for awarding the weekly top predictions for AAPL. The fruit stock has proved to be the poor performer of the week after the Wonderlust event. An opportunity ahead for dip buyers should SPY hold and bounce off 443 next Monday and follow by FOMC announcement.

The Dow closed out a positive week, up by 0.12%. However, the S&P 500 and Nasdaq both suffered a second straight week of losses, lower by 0.16% and 0.39%, respectively.

Risk appetite saw a setback during the final session of the week as stock markets dipped in response to a renewed surge in inflationary pressures. Oil prices made a notable climb, with the WTI benchmark rising to $90 per barrel.

Furthermore, the uptick in Treasury yields added to the dampening effect on risk sentiment. The 10-year yield edged up to 4.33%, inching closer to the August peak of 4.35%, last observed in November 2007.

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Wall Street is parsing through a mixed batch of economic data ahead of the Fed’s policy decision, set to be announced Sept. 20. The central bank is widely expected to hold rates steady next week, but traders will seek insight into how policy makers are thinking about inflation from here.

- Information technology was the worst-performing sector in the S&P 500, down nearly 2%.

- The Health Care Select Sector SPDR Fund (NYSE:XLV) fell 0.2%, managing to outperform other sectors.

- The Technology Select Sector SPDR Fund (NYSE:XLK) was the laggard, down 1.6%, followed by the the Consumer Discretionary Select Sector SPDR Fund (NYSE:XLY), down 1.3%.

The University of Michigan’s U.S. consumer sentiment index declined from 69.5 to 67.7 in September, falling short of expectations of 69.1. The index for current economic conditions dropped from 75.7 to 69.8 during this period. Future expectations improved from 65.5 to 66.3. Year-ahead inflation expectations also decreased from 3.5% to 3.1%, reaching their lowest level since March 2021, reflecting consumer anticipation of reduced inflationary pressures.

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On Thursday, August’s producer price index showed core PPI was held in check last month, though the headline number rose more than expected. Meanwhile, August’s consumer price index on Wednesday showed core CPI was slightly hotter than expected on a monthly basis.

“There was initial investor enthusiasm around inflation data coming in not too far out of expectations. On one hand, the inflation data was hotter than expected, but investors shrugged that off earlier this week thinking that the Fed would not be inclined to raise rates again next week, based on the August inflation data,” said AXS Investments’ Greg Bassuk.

“But I think having digested the additional economic data that’s come out, as well as ongoing geopolitical pressures and other developments, we’re seeing today investors pulling back and taking a breather,” Bassuk added.

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