Markets Rebound – S&P 500 and Dow Jones Lead
U.S. stocks surged on Monday, following the S&P 500’s worst weekly performance since early 2023. Investors shifted focus to inflation, speculating how pressures could influence upcoming interest rate cuts. The S&P 500 (^GSPC) rose more than 1.2%, rebounding from a recent steep loss. The Dow Jones Industrial Average (^DJI) also rallied, climbing 450 points, or 1.2%, while the tech-heavy Nasdaq Composite (^IXIC) gained over 1%.
Sector Gains Drive Recovery
Financials (XLF), Industrials (XLI), and Energy (XLE) stocks were at the forefront of the recovery. Leading the charge among megacap stocks were Nvidia (NVDA), Tesla (TSLA), and Amazon (AMZN), each posting solid gains.
This rebound came after a volatile week driven by economic uncertainty. The August jobs report left market participants guessing the Federal Reserve’s next move. As investors looked for clarity, questions surrounding future rate cuts remained.
Rate Cut Uncertainty Lingers
The jobs report, which was neither too hot nor too cold, did little to settle the debate over how aggressively the Federal Reserve might cut interest rates. Wall Street remained uncertain about whether the Fed would opt for a 25 or 50 basis-point cut at its upcoming policy meeting.
Fed officials, however, hinted that the data would have to strongly support the need for more significant easing. This left many to believe a 0.25% cut was the more likely outcome at the September meeting.
Inflation Data to Drive Rate Decisions
All eyes are now on fresh inflation data set to be released this week. The Consumer Price Index (CPI) report, expected on Wednesday, will provide crucial insights into the inflationary pressures that could influence the Fed’s rate decision. The Producer Price Index (PPI) data, scheduled for Thursday, will be the final major inflation indicator before the Federal Open Market Committee meeting on September 18.
The upcoming reports are expected to play a critical role in shaping market expectations around rate cuts and could lead to further market volatility.
Apple Unveils iPhone 16 and More
Amid the market rebound, Apple (AAPL) also grabbed headlines by unveiling its iPhone 16 at its annual product launch in Cupertino, California. The tech giant introduced updates to its Apple Watch lineup and AirPods Pro 2, which now feature enhanced hearing protection capabilities.
Investors appeared optimistic about Apple’s new offerings, although market reaction to the announcement remained muted amid broader market concerns.
S&P 500 and Dow Jones Lead Recovery
The rebound in US equities signals renewed optimism, but with inflation data looming and rate decisions still uncertain, market volatility is likely to persist. Investors will continue watching closely for clues from the Federal Reserve on the path of interest rate cuts.
Chart by Trading View
