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Market Update 10/02/23

Hashim Effendi

Markets remained mixed between Sept. 26 to Oct. 2 as investors remained spooked by the Federal Reserve’s decision to keep interest rates elevated last week.

Markets closed in the red on Tuesday due to fear regarding the Fed’s decision to keep interest rates elevated. The Dow Jones Industrial Average declined 1.1%, the S&P 500 declined 1.5% and the technology-heavy Nasdaq composite declined 1.6%. 

The Chicago Board Options Exchange Volatility Index serves as a gauge of investor sentiment regarding the equity markets. The CBOE Volatility Index added 12.1% to $18.94 on Tuesday.

The Utilities Select Sector, the Consumer Discretionary Select Sector, and the Technology Sector fell 3.0%, 1.8% and 1.8%, respectively. 

The three indexes closed mixed on Wednesday due to increased yields on sovereign bonds and a spike in crude oil prices. The Dow fell 0.2%, the S&P gained 1 point and the Nasdaq gained 0.2%.

On Wednesday, crude oil prices rose to the highest level year to date. The Brent crude commodity closed at $96.71 and Western Texas Intermediate closed at $93.88.

The 2-Year United States Treasury Note reached 5.139% and the 10-Year United States Treasury Note reached 4.612%.

The Energy Select Sector rose 2.5% while the Utilities Select Sector declined 1.9%.

The CBOE Volatility Index fell 3.8% to $18.22.

By Thursday’s close, the Dow increased 0.4%, the S&P 500 increased 0.6% and the Nasdaq increased 0.8%. The Communications Services Select Sector, the Consumer Discretionary Select Sector, and the Materials Select Sector each added 1.1%.

The Department of Labor announced that weekly jobless claims increased 2,000 to 204,000 for the week ended September 23.

The CBOE Volatility Index declined 4.8% to $17.34.

The three major indexes closed mixed to close out a month of losses in September. The Dow decreased 0.5%, the S&P 500 decreased 0.3%, the Nasdaq rose 0.1%. The Energy Select Sector, the Financials Select Sector and the Health Care Select Sector climbed 2.0%, 0.9%, and 0.8%, respectively.

The CBOE Volatility Index added 1.0% to $17.52.

On Monday, indexes closed mixed as the government avoided a shutdown. The Dow lost 0.2%, the S&P 500 remained flat and the Nasdaq increased 0.7%.

Benchmark Treasury yields closed at 4.682%. The 30-Year United States Treasury Note rose to 4.794%, the highest level since 2010.

By Monday’s close, the CBOE Volatility Index rose 0.5% to a value of $17.61.

Investors should remain vigilant of updates regarding the labor market moving forward. In recent weeks, the labor market has been especially tight despite a heightened federal funds rate. 

If the labor market does not begin to cool, it may be a major sign of concern for the Fed and, subsequently, investors in the near future.

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