After six weeks of gains, U.S. equities pulled back as rising Treasury yields and mixed corporate earnings weighed on markets. Growth stocks outperformed, while small caps struggled. Key economic indicators showed resilience, but credit markets remain tactically unattractive. This week, all eyes are on GDP data, nonfarm payrolls, and consumer sentiment ahead of the U.S. election.
U.S. equities advanced amid strong earnings, with financials and small caps leading the way. The ECB shifted focus to economic growth with a second consecutive rate cut, while resilient retail sales complicated Fed rate-cut bets. Key economic data releases are on tap for the week ahead.
U.S. equities gained as key inflation data, Fed policy shifts, and strong bank earnings drove market sentiment. Global markets responded to central bank signals, with Europe advancing on rate-cut optimism and Asia mixed amid China’s stimulus uncertainty. Treasury yields climbed, reflecting stronger economic growth expectations.
This week’s market update highlights strong labor market data and ongoing global uncertainties as Q4 begins. September’s nonfarm payrolls added 254,000 jobs, reducing unemployment to 4.1%, which has tempered expectations for large Federal Reserve rate cuts. Oil prices surged over 10% due to Middle East tensions, though energy markets remain volatile. Markets gained stability following the resolution of the East Coast port strike, which briefly disrupted operations. Key inflation data and Fed minutes this week will provide further direction amid these geopolitical risks.
September saw equities defy historical trends with a strong performance, buoyed by the Fed's unexpected 50 basis point rate cut and substantial fiscal support from China. The S&P 500 rose 2.1%, with consumer-focused sectors leading. Despite mixed economic data, the labor market showed resilience, and inflation continued to slow. As the Fed maintains a neutral stance, market risks, including inflation and high valuations, remain. Freedom Family Office’s CIO, Kyle Cain, discusses the potential market impact and strategies to capitalize on opportunities.
U.S. equities posted strong gains as tech stocks, fueled by renewed AI enthusiasm, led the charge. International markets also rallied, with Europe benefiting from rate cut expectations and China seeing its best stock performance in over a decade. Meanwhile, inflation continues to cool, signaling that the Fed's recent rate cut is taking effect.