Dow Jones, Nasdaq, S&P 500 weekly preview: Focus on FOMC
Last week, the S&P 500 witnessed its second consecutive weekly loss, with tech stocks feeling the heat amid ongoing inflation worries as the Federal Reserve's next policy meeting looms.
The broad index fell by 0.65% on Friday, closing at 5,117.09.
On the same day, the Dow Jones Industrial Average dropped by 190.89 points, or 0.49%, ending at 38,714.77, while the Nasdaq Composite decreased by 0.96%, finishing at 15,973.17.
Over the week, the S&P 500 saw a slight decrease of 0.13%. The Dow dipped by 0.02%, and the Nasdaq experienced a 0.7% decline.
Investors have been on high alert following a series of data releases last week.
The producer price index (PPI) for February, which measures inflation at the wholesale level, increased more than expected by economists. This development led to a roughly 22 basis point rise in the benchmark 10-year Treasury yield over the week, sparking concerns among investors that the latest economic indicators might be too robust for the Federal Reserve to consider easing monetary policy.
Speaking of which, the Fed is set to hold its two-day policy meeting on March 19 and March 20, with investors keenly awaiting the latest updates on whether Chairman Jerome Powell feels that inflation has eased enough to begin cutting interest rates later this year.
But recent economic data could throw those plans into question, and that, in turn, may result in higher long-term borrowing costs, according to a Macquarie strategist.
“I think the other issue here is not just the 2024 and 2025 [dot plot], its the other issues that the Fed is thinking about which includes that the market is too frothy,” the strategist said.
“For that reason it could signal that it thinks long-term interest rates should be higher.”
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