The Week on Wall Street
Stocks fell last week as soft economic data rattled investors focused on the Fed’s next move with interest rates.
The Dow Jones Industrial Average lost 2.93 percent, while the Standard & Poor’s 500 Index dropped 4.25 percent. The tech-heavy Nasdaq Composite fell 5.77 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, declined 2.91 percent.1,2
Economic Data Unsettles Investors
The four-day trading week got off to a rough start as weak manufacturing data reawakened recessionary fears. All three major averages were down for the first session after the Labor Day holiday. For many, it was reminiscent of August 5, when stocks tumbled as recession worries unsettled investors.3
Attention shifted to Friday’s jobs report as stocks traded narrowly. Markets initially reacted positively to news that job growth rebounded slightly and unemployment ticked down. However, selling pressure increased as the trading session progressed and investors digested the underlying data. The S&P 500 had its worst week since March 2023.4
Focus on Fed’s September Meeting
The Federal Reserve seems poised to make a tough decision regarding monetary policy in its September meeting. The jobs market and other softening economic data have quickly overshadowed concerns about inflation.
However, there’s still a case to be made for a soft landing.
Job growth in August was slower than expected, but 142,000 jobs were created–an uptick that some would argue is an overall positive despite missing expectations. The drop in the unemployment rate to 4.2 percent bolstered the soft-landing narrative.5
Market observers anticipate a 0.25 percent rate adjustment in September, but some contend that the Fed may consider a more significant move. On Friday, Fed Governor Christopher Waller said he was open to a larger move if necessary. Chicago Fed President Austan Goolsbee and New York Fed President John Williams commented similarly during the week.6,7
Weekly Riddle
A 10k cross-country run through the woods attracts 36 entrants. The day is unseasonably hot, and the course is confusing. Three runners get lost, five quit, and 28 finish the run. What happens to the other entrants?
Last week’s riddle: Brian bets Denise that he can find something made out of wood in his workshop that can’t be sawed. Brian wins the bet; what is this common substance?
Answer: Sawdust
John Dombroski Jr. may be reached at (480) 991-1055 or [email protected]
www.grandcanyonplanning.com Know someone who could use information like this?
Please feel free to send us their contact information via phone or email. (Don’t worry – we’ll request their permission before adding them to our mailing list.