• S&P 500 closes down at 4450.32, losing 1.22%, as Technology, Consumer Discretionary, and Energy sectors led the decline.
  • Upbeat US economic data, including a rise in the Empire State Manufacturing Index, fuels optimism that the Fed may achieve a soft landing.
  • US 10-year Treasury yields climb to 4.334%, adding to market jitters, while WTI oil prices rise by 0.56% due to tight supplies.

Wall Street finished the week on a lower note, as a pile of expiring options and an index rebalance sparked volatility in the US equity markets after printing weekly highs during the last two trading days. This, alongside upbeat US economic data and a jump in US Treasury bond yields, turned sentiment sour.

S&P 500 loses 1.22% as expiring options and index rebalance add volatility, despite optimism about a Fed’s soft landing

The S&P 500 registered solid losses of 1.22%, down at 4450.32, while the heavy-tech Nasdaq 100 erased 1.56% of its hard-earned gains, ending at 13,813.59. At the same time, the Dow Jones Industrial Average fell 0.83% and finished the session at 34,618.24

Sector-wise, the biggest losers were Technology, Consumer Discretionary, and Energy, each losing 1.95%, 1.88%, and 1.32%. The least damaged were Utilities, Real Estate, and Industrials, erasing from its value 0.49%, 0.51%, and 0.53%, respectively.

US economic data revealed on Friday echoed an upbeat tone amongst investors, who are optimistic the Federal Reserve would achieve a soft landing. The University of Michigan showed that despite consumer sentiment deteriorating, Americans see a ray of light regarding lower prices. According to the UoM survey, inflation expectations lowered to 3.1% in September for one year and 2.7% for a 5-year horizon.

The New York Fed released its Empire State Manufacturing Index, which rose sharply, crushing last month’s figures and the consensus. At the same time, the Federal Reserve announced that Industrial Production in August expanded by 0.4%, above forecasts but trailed July’s data.

Today’s data, summed up with the previous one revealed in the week, raised speculation the Fed might achieve a soft landing. In the meantime, money market futures remain certain the Fed would skip hiking rates next week when the US central bank meets in Washington, in the only meeting in Q3.

US Treasury bond yields finished the session with the 10-year benchmark note rate at 4.334%, gained 0. 98%. The Greenback, as shown by the US Dollar Index, ended positively, climbing 0.01%, at 105.33..

WTI rose by 0.56% daily in the commodity space underpinned by tight supplies after Saudi Arabia and Russia’s 1.3 million barrel crude oil cut.

S&P 500 Price Action – Daily Chart

S&P 500 Technical Levels


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