Stocks ended the turbulent week mixed, as the S&P 500 (SPX) eked out a 0.24% increase and the Dow Jones Industrial Average (DJIA) added 0.94%, posting a fresh record. Meanwhile, the tech benchmarks Nasdaq Composite (NDAQ) and Nasdaq-100 (NDX) fell 0.92% and 0.74%, respectively, as Friday’s surge wasn’t enough to compensate for earlier losses.
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Despite suffering whiplash at the beginning of August and registering significant swings through the month, all four major indexes managed to close the month with gains. For the DJIA and the SPX, August was the fourth consecutive month in the green. The S&P 500 added 2.28% over the month, helped by a surge in consumer staples, real estate, and healthcare stocks.
Now, investors are bracing for September, which historically is the weakest month for stock market returns. However, the widespread hope is that the Federal Reserve’s pivot to monetary easing will support the stock-market rally going forward.
The latest economic reports painted a near-perfect picture of a still-robust economy, resilient consumer spending, and gradually cooling inflation – which gives the Fed plenty of room to gradually ease its monetary policy. This picture will be tested this coming Friday with the release of the labor-market data, which will be key to the size of September’s rate cut and will influence the scope and pace of the Fed’s further actions.
Markets will be closed on Monday, September 2nd in observance of the Labor Day holiday.
Three Economic Events
Here are three economic events that could affect your portfolio this week. For a full listing of additional economic events, check out the TipRanks Economic Calendar.
» August’s ISM Manufacturing PMI – Tuesday, 09/03 – This report shows business conditions in the U.S. manufacturing sector and serves as a significant indicator of the overall economic conditions. PMIs are considered one of the most reliable leading indicators for assessing the state of the U.S. economy, helping analysts and economists anticipate changing economic trends.
» August’s ISM Services PMI – Thursday, 09/05 – This report shows business conditions in the U.S. services sector, which contributes over 70% of the U.S. GDP. PMI indices are leading economic indicators used by economists and analysts to gain timely insights into changing economic conditions, as the direction and rate of change in the PMIs usually precede changes in the overall economy.
» August’s Nonfarm Payrolls and Unemployment Rate – Friday, 09/06 – The Nonfarm Payrolls and Unemployment reports present the number of new jobs created during the previous month, along with the percentage of people actively seeking employment in the previous month. These reports are two of the most important economic indicators, as policymakers follow the shift in the number of positions since it is strongly associated with the overall health of the economy. One of the Federal Reserve mandates is full employment, and it considers labor market changes when determining its policy decisions. In addition, this report will feed into the central bank’s considerations regarding the extent and pace of the impending monetary easing, expected to begin at the Fed’s policy meeting on September 17th.
For more exclusive market insights and content from TipRanks Macro & Markets research analyst Yulia Vaiman, click here.
