U.S. stocks experienced a mixed performance on Friday, driven largely by investors’ anticipation of the Federal Reserve’s upcoming policy meeting. The meeting is expected to address the current weakening jobs market, with many analysts predicting an interest rate cut.
The Dow Jones Industrial Average (DJI) fell by 0.6%, or 273.78 points, finishing the trading day at 45,834.22 points. The S&P 500 saw minimal movement, dropping less than 0.5% to close at 6,584.29 points. The day was particularly challenging for the healthcare, materials, and industrial sectors, which underperformed significantly. The Health Care Select Sector SPDR (XLV) decreased by 1.2%, while the Materials Select Sector SPDR (XLB) and the Industrials Select Sector SPDR (XLI) recorded declines of 0.8% and 1%, respectively. Overall, eight of the eleven sectors in the S&P 500 ended the day in negative territory.
In contrast, the tech-heavy Nasdaq Composite rose by 0.4%, marking an all-time closing high of 22,141.10 points. The session’s volatility was reflected in the CBOE Volatility Index (VIX), which increased by 0.34% to reach 14.76. On the S&P 500, decliners outnumbered advancers by a 3.3-to-1 ratio. The Nasdaq recorded 106 new highs versus 43 new lows, while the S&P 500 saw 22 new highs and three new lows.
Despite the fluctuations, investor sentiment remained optimistic ahead of the Federal Reserve’s policy gathering. The prior week had been strong for all three major indexes, with the Dow and S&P 500 both reaching record highs. Notably, the Dow had surpassed the 46,000 mark for the first time ever.
The rise in the Nasdaq was significantly bolstered by strong performance from several key tech stocks, particularly Tesla, Inc. (TSLA), whose shares surged by 7.4%. Microsoft Corporation (MSFT) also enjoyed a positive session, with its stock increasing by 1.8%. Microsoft currently carries a Zacks Rank of #2 (Buy).
As market watchers look to the Federal Reserve’s meeting, many anticipate a 25-basis-point interest rate cut, with the CME FedWatch tool indicating a 94.2% probability of such a move, based on recent economic data revealing a softening jobs market and easing inflation concerns.
In related economic news, U.S. consumer sentiment showed a decline, falling to 55.4 in September, marking the second consecutive month of decrease. This reading, recorded through the University of Michigan Survey of Consumers, represents the lowest level since May and is considerably lower than last month’s reading of 58.2, signaling ongoing concerns about consumer confidence.
