US market weekly: S&P 500 ends higher amid inflation concerns, supply disruptions and increased oil prices.

US market weekly: S&P 500 ends higher amid inflation concerns, supply disruptions and increased oil prices.

Last updated: 09 Oct, 2021 | 10:33 am

US market weekly: S&P 500 ends higher amid inflation concerns, supply disruptions and increased oil prices.

US indices started off on a weaker note on Monday as inflation growth due to rise in oil prices weighed on sentiments. There was a huge sell off in tech related stocks. OPEC+ members kept their agreement of gradually increasing the crude production each month. 

US stocks rebounded on Tuesday following a huge sell off in tech stocks in the previous session. Investors were also cautious due to a possible default, in case the debt ceiling limits remain unchanged. The US trade deficit increased to a record $73.3 billion in Aug.

The US indices ended higher on Wednesday as investors were optimistic on both parties agreeing to increase the debt limit and avoiding possible default. US private payrolls also increased even as Covid-19 infections came down. 

The US rallied on Thursday as Senate leaders finally agreed on increasing the debt ceiling to avoid possible default. Investors awaited key Jobs data to be released on Friday to know when the Fed will start with its tapering.

The US indices ended higher on Friday as a temporary deal to raise the debt ceiling until December boosted investor optimism. However, volatility remained elevated due to  a surge in energy prices, persistent supply-chain disruptions, and labor-market shortages. For the week, S&P 500 ended 0.8% higher and Dow Jones 1.2% higher. 

Weekly market stats with IND

Let’s see the major developments during the week:

Debt ceiling: The concerns over the debt ceiling were averted late in the week, at least temporarily. Senate Republicans had agreed to take up a bill to raise the Treasury’s borrowing limit by USD 480 billion, which would allow the federal government to keep paying its bills through at least early December. Treasury Secretary Janet Yellen had warned that the government might not be able to meet its obligations around October 18 if action was not taken.

Jobs report : The U.S. economy added 194,000 jobs in September, the smallest gain this year and well below estimates of 500,000. Despite the disappointing job gains, the unemployment rate fell more than expected, to 4.8%, a new post-pandemic low due to an unexpected drop in the labor-force participation rate. 

Delta variant remains a concern: The spread of the delta variant appears to have dented consumer confidence and disrupted the momentum in job growth. An average of roughly 97,000 coronavirus cases has been reported each day in the United States while the total cases have crossed the 44.3 million mark. However, to battle this, the pace of vaccination has not picked up. About 56.6% of the eligible American population (age 12 and over) are fully vaccinated and over 65.6% have received the first dose.

Oil prices at 7 year high: The U.S. oil benchmark crossed $80 per barrel on Friday for the first time since November 2014 as demand rebounds while supply remains tight. As OPEC+ decided not to increase production more than their modest amount agreed earlier, crude oil prices rose to a seven-year high on Monday. However, there is plenty of room to increase production to offset supply shortages, if they persist. The Department of Energy said Thursday it has no immediate plans to take action to alleviate the price surge.