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Market Update 09/25/23

Hashim Effendi

Markets declined between Sept. 19 and Sept. 25 as investors remained pessimistic regarding the Federal Reserve’s decision to keep interest rates at elevated levels.

Markets lost on Tuesday as oil prices rose and investors remained wary of a continuation of the Fed’s hawkish stance against inflation. The Dow Jones Industrial Average declined 0.3%, the S&P 500 declined 0.2% and the Nasdaq composite declined 0.2%. 

The Consumer Discretionary Select Sector and the Utilities Select Sector both fell 0.5%. 

The Chicago Board Options Exchange Volatility Index serves as a gauge for investor sentiment regarding the equity markets. By Tuesday’s close, the CBOE Volatility Index added 0.79% to reach a value of $14.11.

Investors remained pessimistic as the Fed kept interest rates uncharted and hinted at a potential rate hike in November. The Dow decreased 0.2%, the S&P 500 decreased 0.9% and the technology-heavy Nasdaq decreased 1.5%.

On Wednesday, the Fed announced it would leave interest rates unchanged. “We’re fairly close, we think, to where we need to get, a soft landing is a primary objective,” Powell told reporters during an interview. 

The Technology Select Sector and the Communication Services Select Sector declined 1.6% and 1.4%, respectively.

The CBOE Volatility Index shot up 7.30% to $15.14.

The three major indexes closed lower on Thursday due to bearish investor sentiment regarding the Fed’s decision to keep interest rates elevated. The Dow fell 1.1%, the S&P 500 fell 1.6% and the Nasdaq fell 1.8%.

The Real Estate Select Sector and the Consumer Discretionary Select Sector decreased 3.5% and 2.7%, respectively.

The CBOE Volatility Index increased 15.85% to $17.54.

The Bureau of Labor Statistics announced that jobless claims declined 20,000 to 201,000 for the week ended Sept. 16. The decline in jobless claims has been especially troubling for investors as the labor market continues to remain tight despite the elevated interest rate environment. 

Markets closed in the red on Friday due to Wednesday’s FOMC rate hike decision. The Dow lost 0.3%, the S&P 500 lost 0.2% and the Nasdaq lost 0.1%. The Consumer Discretionary Select Sector, the Financials Sector and the Real Estate Select Sector decreased 1.0%, 0.8% and 0.7%, respectively. 

The CBOE Volatility Index fell 1.90% to $17.20. 

On Monday, the three major indexes ended in the green following the worst weekly market performance since March 2023. The Dow added 0.1%, the S&P 500 added 0.4% and the Nasdaq added 0.5%.

Investors should remain vigilant of economic announcements surrounding the tight job market. If the job market continues to be tight, this could force the Fed’s hand in continuing to raise interest rates, which may be devastating for investors.

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