Markets jumped this week, specifically with large-cap growth companies. Will a rate cut fuel more gains in the near-term?
Monday S&P 500 0.21% | NASDAQ 0.45%
This week is “inflation data week” with the Consumer Price Index (CPI) figures coming out for August. Markets wasted no time climbing on Monday as optimism builds towards the release. Even a flat number will be taken as positive with recent softening in the labor market.
Tuesday S&P 500 0.27% | NASDAQ 0.37%
The Nasdaq rose to another record with the S&P500 joining the celebration with its own all-time high. The CME Group forecasted at least a .25% rate cut from its current benchmark rate.
Wednesday S&P 500 0.30% | NASDAQ 0.03%
Producer Price Index (PPI) data came out which precedes the release of CPI figures. The Atlanta Fed GDPNow forecast SHOWED growth should carry through the end of the 3rd quarter at 3% or higher.
Thursday S&P 500 0.85% | NASDAQ 0.72%
All 3 major indexes closed at record highs as inflation readings edged higher and first-time jobless claims jumped. This is the 4th straight day of gains as investor sentiment has significantly shifted, particularly towards large growth.
Friday S&P 500 0.05% | NASDAQ 0.44%
Consumer sentiment dipped slightly in September but did not slow down growth. Equities capped off a stellar week leading up to the Federal Reserve’s September decision on rates next week.
Conclusion S&P 500 1.59% | NASDAQ 2.03%
The Federal Reserve does not decide on the direction of interest rate policy for almost another week. The markets, however, have already decided that the groundwork has been laid for at least one cut. Large Companies drove markets higher as a declining interest rate environment is tinder for an already hot market. The U.S. Federal Fiscal year-end is fast-approaching, but markets are behaving as if that is a conversation for another day. It will, however, have implications for the federal deficit and treasury markets going forward. This week’s recent growth could be stalled due to the ongoing, and often last-minute, decision-making by Congress. Until that time, markets are celebrating a win on the interest-rate front.
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