What happened in the US stock market in September 2022? Check out key highlights

US stock market this month

US equities continued the downtrend in September amid US Federal Reserve's 0.75% rate hike and higher than expected inflation data. For the month, Dow Jones lost 8.8%, S&P 500 fell 9.3% and Nasdaq ended 10.5% lower.

US stock market movement in September 2022

• The US stocks started the new month on a positive note but soon reversed the trend after due to Fed rate hike fears despite strong August jobs report.
• Positive investor sentiments pushed the US stock market higher in the second week amid midweek decline in oil prices and moderating inflation fears.
• US stock market fell sharply in the third week after the August inflation report hurt investors' optimism for cooling prices. The tech sector was the hardest hit, with the NASDAQ falling more than 5%.
• The US stock market continued its downward trajectory after the US Fed hiked interest rates by another 0.75% to control the rising inflation. The US 2-year treasury crossed the 4% mark.
• The last week was no exception as investor sentiments remained bearish amid recession fears.

US stock market this month: Which sectors gained and which lost?

All the sectoral indices ended sharply lower in the month of September.

US stock market this month: Major highlights

Strong August Jobs report:

Hiring slowed in August but remained sturdy as employers added 315,000 jobs despite softer consumer spending gains, a sputtering economy, and rising interest rates. The unemployment rate rose from 3.5% to 3.7%. Initial unemployment claims fell slightly to 213,000, continuing a trend of falling unemployment claim 

Above expected inflation: 

The consumer price index (CPI) unexpectedly rose month over month in August even as gas prices eased. The index gained 0.1% for the month and was up 8.3% year over year. The core CPI, which strips out volatile food and energy costs, rose 0.6% from July and 6.3% year over year.

Monthly Retail sales: 

Consumer spending in the US held up last month with retail sales rising 0.3%. Economists were expecting sales to be flat for August. 

Interest rate hike: 

The Federal Reserve announced it was raising its key rate by another 0.75 percentage points, lifting the target range to between 3% and 3.25%. Forecasts released by the Fed on Wednesday show policymakers expect it to reach 4.4% by the end of the year - and rise further in 2023.

Mortgage rates: 

Mortgage rates jumped more than a quarter point this week and remain at the highest level in 14 years, offering no relief to sidelined home buyers. New home sales surprised investors by increasing nearly 29% in August to hit a five-month high.

S&P 500 into a bear market: 

The S&P 500 Index broke below its mid-June lows and fell back to November 2020 levels. The week closed out a third consecutive quarter of declines for the index for the first time since 2009. The S&P 500 is fell 25% since Jan 2022 and went deeper into a bear market.

US stock market next month: Where is it headed?

October tends to be a "bear-market killer", known for its historically strong returns. There’s no Fed meeting until November. Still, October should provide valuable clues about the pace of growth and whether the Fed’s aggressive strategy will push the U.S. economy into recession.