Stock Market This Week (US): Rate hike fears pull the US markets lower

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Stock Market This Week

Stock Market This Week (US)

US markets gave up last week's gains and ended lower amid interest rate hike fears after hawkish commentary from US Federal Reserve officials. For the week, the S&P ended 1.21% lower, Dow slipped 0.16% and Nasdaq declined 2.62%. The growth-oriented technology and communication services sectors underperformed within the S&P 500.

US stock market this week: Stocks movement this week

US stock markets closed higher on Monday on the back of a four-week winning streak. Investors ignored weak economic data of China and the US. All the three major stock indexes ended in positive territory.

Wall Street closed mixed on Tuesday as market participants continued to assess the health of the US economy on mixed economic data. Dow and the S&P 500 ended in positive territory while the Nasdaq finished in red.

US stock markets closed lower on Wednesday as investors weighed Fed’s July FOMC minutes. Moreover, retail sales data for July missed expectations raising fear of slowing economic growth. 

Wall Street closed slightly higher on Thursday following mixed earnings results of the retail sector and economic data released on Wednesday.

The US stocks declined on Friday as rate hikes fears dampened investor sentiments after the Fed President indicated further rate hikes.  About a $2 trillion of options contracts expired, adding volatility to markets.

US stock market this week: Major events

Quarterly results: Major US companies with mega retailers reported their June quarter earnings during the week. Walmart share price jumped on above expected revenue and profit for the quarter. Nu holdings reported healthy growth in revenue and customers while Cisco earnings topped analysts' estimates. However, Target stock fell on a sharp decline in earnings as shoppers pulled back on discretionary purchases.

Fed hawkish commentary: Fed FOMC meeting minutes indicated at aggressive rate hikes to tame the growing inflation. Adding to that Fed President James Bullard recently declared that he was likely to vote in favor of another 0.75% interest rate hike at the Fed’s next policy meeting. This dampened investors sentiments who pulled US markets lower for the week. 

Monthly Retail sales: Retail sales proved more resilient than expected in July, rising 0.7% on excluding volatile gas and auto segments. Online sales were up sharply, while restaurant sales also ticked higher, indicating a balance between goods and leisure spending. This suggests household consumption growth can remain a positive force in supporting economic output.

Home sales: Housing-market data is bit discouraging. Residential starts and permits are down, homebuilder sentiment has fallen, and mortgage applications declined to their lowest since November 2020. This trend is not surprising, as rising interest rates have a more immediate impact on home-purchase activity.

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  • How did US market perform this week?

  • Why did home sales data decline in the US?

  • How was the monthly retail sales data?