The Week on Wall Street
Stocks were down for the week as investors appeared to take some profits and traders parsed Fed Chair Jerome Powell’s Congressional testimony.
Markets Wobble
Stocks had a rough start to the week, with the Dow, S&P 500, and Nasdaq each off more than one percent on Tuesday alone. Mega-cap tech stocks were under pressure as investors appeared to take some profits.
Markets clawed back much of their losses on Wednesday and Thursday, with the Fed Chair’s upbeat comments to the Senate Banking Committee boosting stocks. Chair Powell said that once the Fed was confident inflation was tracking “sustainably at 2%,” the Fed would consider cutting short-term interest rates. The S&P 500 and Nasdaq rallied, with the S&P hitting a record close.1,2,3
Friday’s employment news threw some uncertainty into the mix. The economy added 275,000 jobs in February—exceeding the 198,000 expected—but wage growth slowed, and jobless claims edged up. Some investors saw that as a negative, while others viewed it as a “Goldilocks” moment—an economy that’s not too hot or cold. Stocks initially rallied on the news, but profit-takers appeared to arrive as the day progressed.4,5
Fed Watch: Productivity
Productivity is one of the critical data points the Fed reviews to determine its next steps with monetary policy. Producing more goods or services with fewer resources helps the economy grow while managing inflation risks.
The 3.2 percent productivity gains in Q4 reported last week were mainly attributed to the post-pandemic repair of supply chains. However, investors may hope that artificial intelligence will play a more significant role in productivity increases.6,7
Weekly Riddle
The 22nd and 24th U.S. presidents had the same parents– yet the 22nd and 24th U.S. presidents were not siblings. Why?
Last week’s riddle: You can’t outrun it or hide from it. You only notice it when there is light, but it shows only darkness. What is it?
Answer: Your shadow.
John Dombroski Jr. may be reached at (480) 991-1055 or [email protected]
www.grandcanyonplanning.com
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