Closing Stock Market Summary
The stock market had its ups and downs today, but ultimately, it finished the day in an upbeat manner that saw the major indices settle near their best levels of the session. The positive session, which came on another day of low volume, was in question shortly after Fed Chair Powell gave his much anticipated speech at the Jackson Hole Symposium. There were some efforts to spin that speech as being more hawkish than expected as the market retreated into negative territory, yet the speech didn't contain any surprising revelations.
The Fed Chair stuck by the Fed's 2.0% inflation target; he reiterated that the process of getting inflation back down to 2.0% still has a long way to go; and he acknowledged that the Fed will raise rates again if it is appropriate. These are all things he said following the last FOMC meeting.
His concluding remark that the Fed "...will proceed carefully as we decide whether to tighten further or, instead, to hold the policy rate constant and await further data" was a bit of a sticking point for the market, not because of what it revealed, but because of what it did not say. Specifically, there was no mention here, or anywhere in the speech, that the Fed is thinking about cutting rates.
Again, though, following the July 25-26 FOMC meeting the Fed Chair said it is unlikely that the Fed would cut rates this year, so the omission of any rate-cut possibility in today's speech should not have been regarded as a truly hawkish omission.
Seemingly resigned to accept what it heard in the speech at its unsurprising face value, the stock market regrouped and got back on a winning track. It did so with the help of renewed buying interest in the mega-cap stocks and some generally broad-based buying interest that left all 11 S&P 500 sectors in positive territory by the closing bell.
The Invesco S&P 500 Equal-Weight ETF (RSP) increased 0.5%; the Russell 3000 Value Index added 0.5%; and the Russell 3000 Growth Index rose 0.7%.
The best-performing sectors were consumer discretionary (+1.1%), energy (+1.1%), industrials (+0.9%), information technology (+0.8%), and utilities (+0.8%). Gains for the other sectors ranged from 0.2-0.6%.
The communication services sector (+0.2%) was a relative laggard but deserves some praise for rebounding from a 1.7% loss at its worst levels of the day.
Boeing (BA 223.42, +6.11, +2.8%) was the best-performing component in the Dow Jones Industrial Average one day after being the worst performing component in the Dow Jones Industrial Average. Today's turnaround was helped by a Bloomberg report that Boeing is getting ready to resume deliveries of its 737 MAX to China. 25 of the 30 Dow Jones Industrial Average components finished higher.
Away from the stock market, the Treasury market endured its own gyrations. The 2-yr note yield went as high as 5.10% before settling at 5.05%, up four basis points from yesterday's settlement. The 10-yr note yield touched 4.27% soon after Fed Chair Powell's speech but settled the day unchanged at 4.24%.
Strikingly, the low for the S&P 500 today coincided roughly with the 10-yr note yield hitting its high for the day.
- Nasdaq Composite: +29.8% YTD
- S&P 500: +14.7% YTD
- S&P Midcap 400: +6.1% YTD
- Russell 2000: +5.2% YTD
- Dow Jones Industrial Average: +3.6% YTD
Reviewing today's economic data:
- The final reading of the University of Michigan Consumer Sentiment Index for August came in at 69.5 (consensus 71.2) versus the preliminary reading of 71.2. The final reading for July was 71.6, which marked the highest level since October 2021. In the same period a year ago, the index was at 58.2.
- The key takeaway from the report is that it consumers think the rapid improvements seen in the economy in the past three months have moderated, making them more tentative about the outlook.
There is no economic data of note on Monday.
