File photo: Traders work on the floor of the New York Stock Exchange (NYSE) on September 28, 2023 in New York City, USA.Reuters/Brendan McDiarmid/File photo Obtaining license rights
Sept 29 (Reuters) – Stock markets slumped on the final day of the third quarter as investors digested the impact of U.S. inflation reports on the Federal Reserve’s interest rate policy and adjusted their portfolios. , the S&P 500 ended lower on Friday.
The S&P 500 and Nasdaq posted their biggest monthly declines this year, and all three major indexes recorded their first quarterly declines in 2023.
The personal consumption expenditure (PCE) price index (excluding volatile food and energy components) rose by an annualized 3.9% in August, falling below 4% for the first time in two years, data showed. The Fed is tracking the PCE price index toward its 2% inflation target.
The stock price initially rose following the PCE report, but has since fallen.
Eric Friedman, chief investment officer at U.S. Bank Asset Management, said the data revealed that “while better than expected, inflation conditions remain elevated.”
Meanwhile, Friedman said, “We’re at the end of the quarter, and you start to see all kinds of activity in both the stock market and the bond market toward the end of the quarter.”
The Dow Jones Industrial Average (.DJI) fell 158.84 points, or 0.47%, to 33,507.5, the S&P 500 (.SPX) fell 11.65 points, or 0.27%, to 4,288.05, and the Nasdaq Composite Index (.IXIC) rose 18.05 points. Did. It was 0.14%, or 13,219.32.
Among the S&P 500 stocks, energy stocks (.SPNY) fell about 2%, and financial stocks (.SPSY) fell 0.9%. Energy continued to be the sector with the biggest gains in the third quarter.
“Energy and financials are relatively up, and we’re feeling some rebalancing effect today,” Friedman said.
For the quarter, the S&P 500 was down about 3.6%, the Dow was down 2.6%, and the Nasdaq was down 4.1%. In September, the S&P 500 was down 4.9%, the Dow was down 3.5%, and the Nasdaq was down 5.8%.
The highly anticipated PCE data follows the Fed’s hawkish long-term interest rate outlook released last week, which sent stock prices into turmoil as benchmark U.S. Treasury yields rose to a 16-year high. ing.
“Equity investors are finally starting to wake up to the Fed’s moves, and the Fed is predicting that stocks will continue to rise for a long period of time, and that they are replacing stocks,” said Paul Nolte, senior wealth advisor and market strategist at Murphy & Sylvest Wealth Management. He commented that there are options.”
Investors were also paying close attention to Washington. Hardline Republicans in the U.S. House of Representatives have rejected a bill proposed by their party leaders to temporarily fund the government, almost guaranteeing a partial shutdown of federal agencies starting Sunday.
Traders were also wary that the $16 billion JPMorgan fund, which is expected to reset its options positions on Friday, could be a source of further market volatility.
In corporate news, Nike (NKE.N) shares rose 6.7% after the world’s largest sportswear maker’s first-quarter profit beat Wall Street expectations.
Declining issues outnumbered advancing issues on the New York Stock Exchange by a 1.2-to-1 ratio. On the NYSE, 54 stocks hit new highs and 142 stocks hit new lows.
Advancing issues outnumbered declining issues on the Nasdaq by a 1.1-to-1 ratio. The Nasdaq recorded 46 new highs and 168 new lows.
Approximately 11.3 billion shares were traded on U.S. exchanges, compared to the daily average of 10.4 billion over the past 20 trades.
Reporting by Louis Krauskopf in New York and Shashwat Chauhan and Shristi Achar A in Bengaluru. Editing: Arun Koyyur, Maju Samuel, David Gregorio
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