U.S. stocks extended their sluggish start to September, with investors keeping a watchful eye on the Federal Reserve’s upcoming meeting later in the month.
Here are the key market developments as of 10:49 ET (14:49 GMT):
Dow Jones Industrial Average: The Dow Jones was down by 170 points, representing a 0.5% drop.
S&P 500: The S&P 500 experienced a 0.7% decline.
NASDAQ Composite: The NASDAQ Composite declined by 0.9%.
On the previous day, the Dow Jones Industrial Average had concluded almost 200 points lower, marking a 0.6% drop. In the same session, the Nasdaq Composite slipped 0.1%, and the S&P 500 decreased by 0.4%.
Rising Oil Prices and Inflation Concerns:
A significant factor impacting global sentiment this week is the sudden surge in oil prices. Saudi Arabia and Russia unexpectedly extended voluntary supply cuts until year-end, leading to a sharp increase in oil prices. While crude prices pulled back slightly on Wednesday, investors remain concerned about their impact on inflation and the Federal Reserve’s future interest rate decisions.
The Federal Reserve is widely expected to refrain from raising interest rates in September. Gov. Christopher Waller stated that recent economic data provided the central bank with room to assess the need for interest rate hikes.
Fed’s Beige Book and Economic Data:
Investors are closely monitoring economic data, including the release of the Fed’s Beige Book, which offers insights into economic conditions across the United States. Additionally, the ISM non-manufacturing purchasing managers’ index, which measures activity in the services sector, came in at 54.5 in August, slightly below expectations.
Several Federal Reserve speakers are scheduled to address the public in the coming week, with Dallas Fed President Lorie Logan among them.
Global Economic Concerns:
Economic reports from Europe and China have been disappointing this week, with retail sales falling in the eurozone and German factory orders declining in July.
Tech Sector in Focus:
In corporate news, the tech sector garnered attention as the European Commission designated major tech companies, including Amazon, Apple, Alphabet, Meta, and Microsoft, as “gatekeepers” under its new Digital Markets Act. These firms will face requirements such as interoperability with rival messaging apps and user choice regarding pre-installed apps.
Following the market close, companies like GameStop, ChargePoint, and American Eagle Outfitters are set to report their earnings.
Manchester United Stock Decline:
Manchester United experienced an 18% stock decline, the largest one-day drop, amid reports that the club’s owners, the Glazer family, are withdrawing the club from the market after failing to reach their desired selling price.
Investors are navigating a complex landscape marked by economic data, global developments, and corporate news, with the Federal Reserve’s meeting later in the month serving as a focal point for market participants.