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Key Wall Street indices completed Thursday in the red zone against the background of the growing concern of investors regarding future inflation and unemployment. Expectations on economic indicators were higher than forecasts, which added uncertainty in the market and strengthened discussions about the further direction of interest rates.
According to the latest data, the consumer price index (CPI) in September increased by 0.2% compared to the previous month and by 2.4% in annual terms. Both indicators slightly ahead of the forecasts of analysts, which indicates the preservation of inflationary pressure. The main index was most attention, which eliminates fluctuations in food and energy products: in the annual calculus, its growth was 3.3%, which also exceeded the expected 3.2%.
Another important factor that determined the mood in the market was the report on applications for unemployment benefits. During the week, which ended on October 5, the number of new applications increased to 258 thousand, significantly exceeding the forecast of 230 thousand. This was a bell for those who carefully monitor the state of the labor market and its influence on the US economy.
"Investors were in a difficult situation: on the one hand, the inflation report indicates its higher pace than expected, on the other hand, unemployment data indicate a slowdown in the economy," Jack Ablin, chief investment director of Cresset Capital, commented on the situation. "The combination of these factors creates an unfavorable picture - this is the worst of the possible scenarios."
The publication of new economic data instantly reflected in the expectations of traders about the actions of the federal reserve system (Fed). According to the latest data from CME FedWatch, the probability of reducing the rate by 25 basic points in November increased to 80%. At the same time, the chance that the regulator will leave the bets unchanged is about 20%. Such uncertainty enhances pressure on the market and causes fluctuations among the participants.
The result of the trade day was a decrease in the main indices, which reflects the general mood of investors who turned out to be between conflicting economic signals.
Against the background of volatile economic data and disagreements among the leaders of the federal reserve system (Fed), questions about the future of interest rates continue to remain in the spotlight. On Thursday, President of the Federal Reserve Bank of Atlanta Rafael Bostik said that it remains confident that the reduction in bets at the next meeting is unlikely. In his opinion, the current instability of inflation data and the labor market determines the feasibility of holding bets at the same level.
Not all FRS leaders share this position. The GULSBI, the president of the Chicago Federal Reserve Bank, predicts a "smooth" reduction in bets over the next 18 months. At the same time, John Williams, the head of the New York Federal Reserve Bank, also expressed confidence that a decrease in betting is just a matter of time, but in a more distant perspective.
Such discrepancies in estimates create a voltage among market participants who are trying to understand how the regulator will respond to dynamically changing macroeconomic conditions.
Against the background of uncertainty, the indices of the main stock markets completed the day in the negative zone. Dow Jones lost 57.88 points, which is equivalent to 0.14%, stopping at the mark of 42,454.12. The S&P 500 wide market index of 11.99 points (0.21%), closing at 5,780.05, and the high -tech NASDAQ rolled away by 9.57 points, or 0.05%, to 18,282.05.
It is noteworthy that both S&P 500 and the Dow all the day have previously reached their historical maximums, but weak economic data and disagreements among the leadership of the Fed cooled this optimism.
Against the background of a general decline, only three of the eleven main industry indices S&P 500 completed the day with a positive result. The leader was the energy sector, which added 0.8%, which was facilitated by an increase in oil prices. Such dynamics is associated with an increase in fuel consumption in the United States before approaching the hurricane Milton, which fell on the west coast of Florida on the night of Wednesday to Thursday.
Oil prices continue to grow confidently, which is facilitated by two main factors. Firstly, the demand for fuel increased sharply against the background of preparation for the consequences of the hurricane Milton, which pushed the quotes up. Secondly, fears are preserved about the stability of supplies against the background of ongoing geopolitical conflicts in the Middle East. These factors provided strong support for the energy sector, which became the only bright spot against the general background of reducing stock markets.
This behavior of markets illustrates current conflicting moods-investors are forced to maneuver between positive and negative signals, which heats instability and enhances the volatility on Wall Street.
Investors are preparing for the beginning of the corporate reports for the third quarter, which promises to shed light on the financial condition of the largest companies in the United States. Particular attention will be focused on the results of the largest banks that will publish their quarterly reports this Friday. The reports of financial giants traditionally set the tone for the entire reporting season and serve as an indicator of the state in which the economy is in conditions of changeable macroeconomic conditions.
According to the forecasts of LSEG analysts, it is expected that the profit of companies included in the S&P 500 index will grow by 5% in annual calculation following the results of the third quarter. These data will be important to determine the general dynamics of the market, since the growth of corporate income is a key factor for maintaining current shares.
One of the noticeable outsiders of Thursday was Delta Air Lines, whose shares fell by 1% after the publication of the revenue forecast, which turned out to be lower than the expectations of analysts. The air carrier management refers to a decrease in business activity and travel expenses, which may affect income to the coming quarters. Delta pessimistic forecasts and other airlines pulled down: American Airlines shares decreased by 1.4%, reflecting the total voltage in the industry.
The pharmaceutical sector did not bypass either. Pfizer quotes fell by 2.8% against the background of the news that the former top managers of the company distance from the initiative of the activist Starboard Value. This fund actively advocates revising the manufacturer's strategy, including a possible business restructuring. This increased the pressure on the Pfizer shares, which already experienced difficulties against the background of weak results over the past periods.
On Thursday, at the US stock platforms, the volume of trading was lower than the average indicator over the last 20 sessions - the owners were replaced by 11.02 billion shares against an average value of 12.06 billion. This may indicate the growing caution of investors before the start of the reporting season and high uncertainty about the further actions of the Fed.
On the New York Stock Exchange (NYSE), the number of shares that decreased in price exceeded the number of 1.39 to 1 ratio of 1.39. Despite the total decline, the market recorded 185 new maxima against 55 new minimums, which indicates a demand for certain segments shares.
On the Nasdaq technically oriented exchange, the situation was even more intense: 2576 shares were lost in price, while only 1616 showed growth. As a result, the ratio of "falling" to the "growing" was 1.59 to 1, which indicates the dominance of bear mood among traders. The Nasdaq Composite index recorded 60 new annual maximums and 163 new minimums - such an imbalance illustrates the high volatility and indecision of market participants.
The S&P 500 index, reflecting the state of a wide range of companies, also recorded a significant number of new maximums (22) against the background of only 2 new minimums. This indicates the heterogeneity of moods in the market: while some companies demonstrate confident growth, others continue to experience the pressure of macroeconomic factors and internal problems.
The result was a general decrease in indexes, which emphasizes how difficult it is for investors today to navigate in the conditions of conflicting economic signals. All attention is focused on the upcoming quarterly reports and comments of top managers who can either return confidence or aggravate doubts about the stability of the current market levels.
American stock markets closed Thursday in the negative zone, although the total losses were less than expected against the background of daytime fluctuations. The real estate sector, which sensitively reacts to changes in interest rates, turned out to be the most vulnerable. The S&P 500 real estate index showed the worst dynamics among the 11 main sectors, which reflects the anxieties of investors regarding the possible tightening of credit conditions.
The MSCI shares index, tracking assets around the world, lost 0.18 points, or 0.02%, closing at 848.46. Although a more significant fall was observed during the session, investors managed to compensate for part of the losses. In the European markets, meanwhile, the Stoxx 600 index decreased by 0.18%, being under pressure before publishing the budget of France in 2025. Investigators of investors are explained by concerns about further fiscal policy in conditions of macroeconomic instability.
A Friday employment report in the United States was a surprise for the markets, as he demonstrated a more stable situation in the labor market than predicted. This influenced expectations for further actions of the federal reserve system. Now market participants are less and less believe in an aggressive decrease in bets and consider a softer script. The Fed The Fed The Federal Reserve, Jerome Powell and his colleagues, said that the priority is now maintaining stability in the labor market, which indicates a change in the focus of the regulator from the fight against inflation.
Some representatives of the Fed confirmed that, despite the slowdown in inflation, the situation in the labor market remains strong, but vulnerable to deterioration. This gives the Central Bank a space for a more gradual reduction in bets in the coming months, which will probably take place with slow steps. This approach reduces the risks of excessive impact on the economy and allows you to evaluate the market reaction to changes.
The profitability of the US government bonds on Thursday demonstrated multidirectional movements. The reference 10-year treasury papers added 0.4 basic points, reaching a level of 4.071%. Earlier, during the session, the profitability rose to 4.12%, which indicates fluctuations in the expectations of investors regarding the further policy of the Fed.
At the same time, 2-year-old treasury bonds, which most often respond to changes in interest rates, fell by 5.6 basic points to 3.962%. Such a decrease reflects cautious forecasts for the pace of future softening of monetary policy.
The dollar index, which measures its cost relative to six main currencies, fell by 0.03% to 102.85 after the previous growth by 0.27%. This shows that despite the recent fortification, the dollar has not yet found a clear direction. The euro also demonstrated weakness, losing 0.03% and dropping to $ 1.0936. Further changes in the EUR/USD pair will depend on the economic data and signals of central banks, which enhances the volatility in the foreign exchange market.
Against the background of multidirectional signals from the economic data and statements of the Fed Representatives, investors are forced to review their strategies, which leads to unstable movements at all market segments. The focus of attention remains the potential steps of the regulator and the reaction to global macroeconomic events, which enhances uncertainty and forces the market participants to be careful.
The dollar loses its position against the yen: comments of the Japanese Bank cause fluctuations
The American dollar has weakened by Japanese yen by 0.51%, dropping to a mark of 148.53. The exchange rate was influenced by the statements of the deputy manager of Japan Ryozo Khimino, who on Thursday made it clear that the Japanese regulator could revise the policy of zero interest rates. According to him, the Japanese Bank is ready to discuss the possibility of raising bets if confidence in the implementation of current forecasts for economics and inflation will be quite high. Such statements have enhanced speculation in the market about possible changes in Japan's monetary policy.
The British pound also demonstrated a slight decline, losing 0.07% and reaching $ 1.3061. Despite the minimum fluctuations, investors continue to monitor the economic data of Great Britain and the statements of the Bank of England, trying to understand whether the regulator will retain the current rates or take more aggressive steps to combat inflation.
The British pound also demonstrated a slight decline, losing 0.07% and reaching $ 1.3061. Despite the minimum fluctuations, investors continue to monitor the economic data of Great Britain and the statements of the Bank of England, trying to understand whether the regulator will retain the current rates or take more aggressive steps to combat inflation.
Oil prices returned to growth after two days of decrease, which contributed to several factors. Firstly, the consumption of fuel increased sharply against the background of a hurricane Milton, who hit Florida and provoked mass purchases of fuel. Additional support for the quotes was concerned about deliveries from the Middle East, where a tense geopolitical situation is preserved.
In addition, there were signs that the demand for oil by the largest world economies - the USA and China - may increase. This gave an impulse to the market, returning the optimism of investors and pushing prices up.
Against the backdrop of these news, the prices of American raw oil (WTI) jumped by 3.56%, reaching $ 75.85 per barrel. In parallel, Brent oil, the standard for European markets, had risen in price by 3.68% and entrenched at 79.40 dollars per barrel. This strengthening reflects the increased expectations of market participants regarding the further growth of consumption and limited supply against the background of the preserved risks of interruptions.
The current volatility in the oil market shows how much global factors can affect energy quotes. The surge of demand caused by natural disasters, and the remaining instability of supplies due to the geopolitical situation create double pressure on prices. These circumstances force traders to act quickly, given that even the slightest changes in demand or proposal can significantly move the market in one of the sides.
Against this background, participants continue to carefully monitor the dynamics of consumption in the USA and China - the two largest economies in the world. Any signs of increasing demand from these countries can become a trigger for a new round of prices.
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