- Stocks experienced a decline as heightened volatility was magnified by a significant options event, all while traders evaluated the repercussions of a labor strike that impacted Detroit automakers and sifted through economic data in anticipation of the Federal Reserve's decision. On Friday, prominent technology companies, including Nvidia Corp. and Meta Platforms Inc., bore the brunt of the losses, each witnessing a drop of more than 3.5%. This resulted in the S&P 500 wiping out its gains for the week, while the Nasdaq 100 saw a nearly 2% decline.
- A gauge measuring chipmakers faced a setback following a news report indicating that Taiwan Semiconductor Manufacturing Co. had requested major suppliers to postpone the shipment of high-end equipment. Ford Motor Co. and General Motors Co. experienced volatile trading sessions. Meanwhile, Treasury yields experienced an uptick, and the value of the dollar remained relatively stable. The VIX, a widely monitored indicator of equity volatility on Wall Street, climbed from its lowest level since 2020.
Why it matters
US inflation expectations fell to their lowest levels in more than two years as consumers grew more optimistic about the economic outlook. However, sentiment fell to 67.7 points below the average estimate. The factory activity index in New York State rose unexpectedly due to new orders. Production at factories increased slightly in August, due to a decline in automobile production. The strength of the US economy's performance will prompt the Federal Reserve to plan to raise interest rates again this year and to remain at the peak level next year for a longer period than previously expected, according to economists.