Market Recap (9/17/23)

Market Recap of the week of September 11, 2023 - September 15, 2023

Source: Apple Stocks Application

Overall Market Trends:

This past week, the Dow Jones Industrial Index constantly fluctuated, increasing and decreasing nearly every other day. However, it ended the week negative, decreasing a total of 147 points (0.42%) on the week. Similarly, the NASDAQ ended the week down 183 points (1.32%), the New York Stock Exchange ended the week down 2.50 points (0.02%), and the S&P 500 ended the week down 37.50 points (0.84%). This negative trend is primarily due to inflationary worries among investors and a new auto-workers strike. The Federal Reserve (Fed) has been increasing interest rates to cool down inflation since early 2022.

When interest rates rise, stocks go down as it becomes more expensive for companies to borrow money, limiting their cash flow and stability. This, in effect, puts more pressure on the share prices, driving them down. The opposite occurs when interest rates rise.

Therefore, when investors looked towards next week and saw that the Fed was holding a policy meeting, they became a bit weary of the stock market, driving share prices down. It has become a widespread trend that the market tends to trend downward prior to the Fed holding a meeting. This is due to the fact that no one knows whether the Fed is going to raise interest rates or keep them the same. However, investors are starting to believe that interest rates will not be decreasing substantially anytime soon.

In addition, there was a new auto-workers strike that surfaced this week. This slightly worried investors as an auto-workers strike could increase the prices of automobiles, subsequently increasing inflation and, therefore, interest rates. However, this has only just come to fruition so it has not taken a full toll on the market yet.

Interest Rates Graph:

Looking Towards the Future:

This upcoming week, the Federal Reserve will be holding a meeting to discuss policy. The decision made during this meeting will likely determine the trends of the entire week. If they decide to increase interest rates, the market will likely have a third straight week of losses. However, many investors believe the Fed will decide to hold interest rates steady. While this could suggest that the Fed decided to look towards lowering interest rates in the near future, it is hard to tell.

Earnings Reports to Look Foward to This Upcoming Week: