US Stocks Set To Finish Week In The Red, Marking End Of Tough September: What's Driving Markets Friday?

On Friday, U.S. stocks displayed negative performance and were poised to conclude the month with declines across various sectors except for energy.

The S&P 500 is heading for its fourth consecutive week of losses, marking a negative streak that has not been observed so far this year. September is expected to stand as the worst-performing month for the broader market since December 2022.

The August report on the Federal Reserve’s preferred inflation measure yielded a subdued result. Yet the data failed to maintain an upbeat risk sentiment following the market’s positive performance Thursday.

The impending fear of a government shutdown, should a deal not be reached, continues to weigh on risky assets.

New York Federal Reserve President John Williams anticipates a moderation in GDP to approximately 1.25% next year, expects inflation to ease to 3.25% this year and foresees the Federal Reserve nearing its peak for the federal funds rate, he said Friday.

Cues From Friday Trading:

On Friday, both the S&P 500 and the Dow experienced losses, declining by 0.3% and 0.7%, respectively. For the month of September, these two indices have registered declines of 5% and 3.6%, respectively.

Tech stocks relatively outperformed, as the Nasdaq 100 was flat for the session, although it remained 5% lower for the month.

Small-cap stocks in the Russell 2000 edged down by 0.5% for the session, following a steep drop of over 5.5% for the month of September.

US Index Performance On Friday

Analyst Color:

With the market playing in line with typical seasonality so far this year, Carson Group’s Chief Investment Strategist Ryan Detrick said he sees a strong fourth quarter. Preelection years typically tend to be strong, with most of those gains happening early, he said.

Commenting on the weakness seen in August and September, the analyst said, “We classify this type of weakness as perfectly normal and likely necessary for stocks to catch their breath before a new surge higher.”

“Adding to reasons to look for a rally, when stocks fall more than 1% in both August and September, a big bounce back in October is normal, as is a great fourth quarter,” he added.

Friday’s Trading In Major US Equity ETFs

• The SPDR S&P 500 ETF Trust SPY was 0.1% lower to $427.87.
• The SPDR Dow Jones Industrial Average ETF DIA fell 0.44% to $335.17.
• The Invesco QQQ Trust QQQ rose 0.2% to $358.50, according to Benzinga Pro data.

Looking at S&P 500 sector ETFs:

• The Consumer Discretionary Select Sector SPDR Fund XLY was the outperformer, up 0.44% today.
• The Energy Select Sector SPDR Fund XLE was the laggard, down 1.9%.

Latest Economic Data

Aside from the PCE report, the University of Michigan upwardly revised the final consumer sentiment reading for September from 67.7 to 68.1.

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Stocks In Focus:

• Nike, Inc. NKE climbed nearly 6% after beating earnings estimates last quarter.
• Shares of meal-kit company Blue Apron Holdings, Inc. APRN jumped over 130% after it announced a deal to acquire food delivery startup Wonder for $13 per share.
• Carnival Corp. & plc CCL fell over 7% despite reporting better-than-expected results, as rising crude prices dampened the profit outlook.

Commodities, Bonds, Other Global Equity Markets:

Crude oil fell 0.6%, with a barrel of WTI-grade crude trading at $90.40. The United States Oil Fund ETF USO was 0.5% lower to $81.14.  

Treasury yields were flat, with the 10-year yield at 4.57% and the two-year yield at 5.05%. The iShares 20+ Year Treasury Bond ETF TLT was flat for the day. 

The dollar slightly rose, with the U.S. dollar index, which is tracked by the Invesco DB USD Index Bullish Fund ETF UUP, up 0.1%. The EUR/USD pair, which is tracked by the Invesco CurrecyShares Euro Currency Trust FXE, was flat at 1.0566.

European equity indices had a mixed session. The SPDR DJ Euro STOXX 50 ETF  FEZ was flat.

Gold tumbled 0.7% to $1,850/oz, while silver fell 1.6% to $22.23. Bitcoin BTC/USD edged 0.7% lower to $26,842.

Staff writer Piero Cingari updated this report midday Friday. 

Photo via Shutterstock.