Stock market today: Wall Street closes in the red, giving the S&P 500 another week of weakness

Wall Street ended a choppy trading week with sharp declines on Friday, sending the S&P 500 to its second straight week of losses.

The benchmark index fell 1.2%, its first loss in three days. The Dow Jones Industrial Average fell 0.8% and the Nasdaq index fell 1.6%.

Shares of U.S. automakers showed resilience after members of the United Auto Workers walked out of several factories overnight. Ford is down 0.1% and General Motors grew 0.9%. Stellantis shares rose 1.9% in trading on the Milan Stock Exchange in Italy.

At the beginning of the week, the market recorded some gains following several good economic indicators. Wall Street is monitoring economic developments ahead of the Federal Reserve’s interest rate meeting next week. The central bank is expected to keep interest rates stable after spending much of the past two years raising rates to curb inflation.

The improvement in market sentiment this week followed Thursday’s report that showed U.S. shoppers spent more at retail stores last month than economists expected. Another report released Thursday morning indicated that fewer workers than expected filed for unemployment benefits last week.

A third report released Thursday shows prices paid at the wholesale level rose more last month than economists expected. This could be a discouraging sign for households if higher-than-expected inflation spills over to the consumer level.

Meanwhile, a closely watched study from the University of Michigan showed that consumer confidence deteriorated slightly in September. However, the latest data shows that the overall sentiment remains positive. It also said consumers cut their inflation expectations for next year to 3.1%, the lowest since March 2021.

Matthew Stucky, the senior portfolio manager at Northwestern Mutual Wealth Management, expressed that, in terms of data analysis, all appeared to be in order. “The market is focused on what will impact the Federal Reserve’s activities.”

The central bank aggressively raised interest rates in 2022 and 2023 to curb inflation but left interest rates unchanged at its last meeting. Inflation essentially falls to the 2% target set by the central bank.

Stucky mentioned that a significant portion of the positive outlook regarding the Federal Reserve’s continuity has already been factored into market valuations.

Consumer inflation was slightly higher than expected in August, but the biggest impact was due to high gasoline prices. Oil prices rose in the summer after Saudi Arabia decided to maintain production cuts. This has raised concerns about rising gasoline prices and worsening inflation.

Investors are largely betting that the Fed will keep interest rates steady after its two-day meeting on Wednesday. They also expect the central bank to keep interest rates stable for the rest of the year. The Fed has said it is prepared to raise interest rates further if necessary to further combat inflation.

All sectors of the S&P 500 Index closed the Red Friday session, and the biggest drag on the index was technology stocks. Microsoft fell 2.5% and chipmaker Nvidia fell 3.7%.

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