Stock Market This Week (US): Why did Nasdaq crash 3% this week? Check out the key highlights
Stock Market This Week (US)
Markets whipsawed throughout the week as investors weighed inflation data that will inform the Fed as it continues to hike interest rates to cool off price increases. Most sectors closed in the red for the week, with S&P 500 and the Nasdaq ending the week 1.55% and 3.11% lower, respectively.
US stock market this week: Stocks movement this week
The US stocks closed lower on Monday as NASDAQ fell to the lowest level in two years. The market panicked after JP Morgan's CEO warned that the US would likely fall into a recession in 2023. The 10-year Treasury note was lower at the start of the week.
On Tuesday, the market opened on a positive note but reversed all the gains from the start of the day as investors looked ahead to key inflation data later in the week. Bond prices fell, and the yield on the US 10-year Treasury neared the key 4% level.
The US equity market continued to slide lower for the sixth consecutive day on Wednesday and hit its lowest close since November 2020. Federal Reserve's meeting minutes were released, and it showed that the central bank expects to keep hiking interest rates and keep them high until inflation cools off.
On Thursday, the US market cracked in the initial hours after inflation data was released. However, stocks staged a massive comeback and broke the six-day losing streak to close in the green. The day marked the fifth largest intraday reversal from a low in the history of the S&P 500.
The US stock market closed in the red on Friday. Stocks fell to session lows after a consumer survey from the University of Michigan showed inflation expectations were increasing, a sentiment that the Federal Reserve is likely watching closely.
US stock market this week: Major events
US to fall in recession: JPMorgan CEO said this week that the US economy is likely to fall into recession during the spring or summer of 2023. He added that there is uncertainty about how bad a recession will be and is not predicting just a mild dip that some bullish investors are looking for. It can go from very mild to quite hard, and a lot will be reliant on what happens with this war.
September Producer Price Index: The PPI number is one of the inflation gauges investors are watching alongside the Federal Reserve. The producer price index rose by 0.4% in September, beating a Dow Jones forecast for a 0.2% gain. On-year, PPI rose 8.5%, a slight deceleration from the 8.7% increase in August.
September Inflation Data: Consumer prices (CPI) rose 8.2% in September compared with a year earlier. Sequentially (MoM), prices increased 0.4% from August to September after having ticked up 0.1% from July to August. Core inflation climbed 0.6% from August to September and 6.6% over the past 12 months. The yearly core figure is the biggest increase in 40 years.
Treasury yield: The Treasury yields increased over the week, with the 10-year US Treasury note yield going above 4.0%, while the two-year yield hit 4.5%, its highest level since 2007.
Oil Prices decline: Crude oil prices fell more than 7% this week on global recession fears and resurgence of covid cases in the world’s largest oil importer China.
What is CPI inflation for September for the US?
Consumer prices (CPI) rose 8.2% in September compared with a year earlier in the US.
When will the recession come?
As per JP Morgan CEO, the recession is most likely to hit the US by Spring or Summer of 2023. The severity cannot be predicted but investors should be prepared for it.
Which sectors performed well this week in the US market?
Consumer noncyclic, Financial, and Transportation was the only sector that closed in the green this week for the US market.
Which are the worst-performing sectors for the week?
Technology and Capital Goods are the worst-performing sectors for the week, falling 6.62% and 3.70%, respectively.