The S&P 500 (SPX) lost 0.2% last week following a sentiment reversal on Friday, when the index dropped 1.2%. This way, the S&P 500 fell below the short-term supporting trend line, which could invite more pressure in the near term.
The Nasdaq Composite Index (IXIC) fell 0.4% after a 1.6% decline on Friday. Finally, the Dow Jones Industrial Average (DJI) closed 0.1% in the green despite a 0.8% fall on Friday.
“Did something bad happen? The short answer is 'no,' it didn’t. Yes, there were some negative headlines, specifically the prices index in Empire Manufacturing jumped (hinting at a bounce back in inflation), a negative Reuters article on TSM weighed on semiconductors and the number of strikes in the economy is growing,” wrote analysts at The Sevens Report.
Looking forward to this week, the key event is Wednesday’s Fed meeting. The market doesn’t see the Fed hiking in September.
“The decision could easily be hawkish given the 2024 “dots” as that could damage the “Fed almost done” pillar of the rally,” the analysts added.
“The bottom line is that just because the Fed won’t hike rates, don’t think this meeting can’t cause volatility.”
On the data front, the key report is Friday’s September flash PMI, while the Philly Fed manufacturing index reading is out a day earlier.
As far as earnings are concerned, the most notable reporters include AutoZone (NYSE:AZO), FedEx (NYSE:FDX), General Mills (NYSE:GIS), and Darden Restaurants (NYSE:DRI).
What analysts are saying about US stocks
Sevens Report: “The FOMC decision has the opportunity to support the “Fed is almost done” pillar. If that happens, stocks can drift higher… If the Fed outlook changes from “Fed almost done” to “Fed will cut soon” that will present a new challengeRead more on investing.com