## Market Trends: Gilead Sciences and Kroger See Gains, Wall Street Awaits Inflation Readings
The S&P 500 finished marginally higher last Friday, though significantly below its session high. All three major Wall Street averages posted weekly declines, with investors concerned about interest rates and awaiting upcoming US inflation readings. The Dow Jones Industrial Average rose by 0.22%, the S&P 500 by 0.14%, and the Nasdaq Composite by 0.09%.
Investors eyeing the Consumer Price Index (CPI) for August, due out on September 13, are concerned about rising oil prices. They are seeking clues about the Federal Reserve’s likely actions on interest rates. Traders are betting on a 93% probability that the Fed will maintain current rates after its next meeting ends on September 20. However, they are pricing in a more divided 53.5% chance for another pause at the November meeting, according to CME group’s FedWatch Tool.
## Rising Rates Causing Investor Concern
US 10-year notes saw lower yields, but a rise in US 2-year Treasury yields seemed to pressure stocks. David Lefkowitz, head of US Equities at UBS Global Wealth Management, noted that investors have been increasingly worried about rising rates since early August. “The tone has changed in recent weeks because of the move up in rates. People are questioning whether this is a risk to economic growth. Are higher rates going to lead to some slowdown in conjunction with the dwindling of excess consumer savings,” said Lefkowitz.
For the week, shortened by the Labor Day holiday, the S&P 500 fell 1.3%, while the Nasdaq lost 1.9%, with both breaking two weeks of gains. The Dow fell 0.8%.
## Individual Stocks and Sectors
In individual stocks, Kroger closed up 3% after the retailer beat quarterly adjusted profit estimates. Gilead Sciences gained 2.8% after BofA Securities upgraded the drugmaker to “buy”. GameStop finished down 6% after a report that the US Securities and Exchange Commission was investigating the video game retailer’s chairman, Ryan Cohen.
The S&P 500 technology sector closed higher after losing 2.9% in two sessions. The energy sector, up 0.97%, had the biggest percentage gains among the 11 S&P 500’s industry sectors as oil prices rose. The utilities sector gained 0.96%, while the biggest decliner was the real estate sector, which lost 0.63%.
## Inflation Fears
This week’s economic data also fueled inflation fears. Services activity data came in stronger than expected, and weekly jobless claims fell. “My expectation is that the CPI print could come in higher than expected (with) the price of oil pushing higher,” said Phil Blancato, CEO of Ladenburg Thalmann Asset Management.
Mixed comments from Fed officials have fueled uncertainty. New York Fed President John Williams kept his options open this week, while Dallas Fed President Lorie Logan said that while it “could be appropriate” to keep rates steady at the next meeting, more tightening might be needed.
Original Story at www.reuters.com – 2023-09-08 20:53:00