US stocks closed mixed, with both the S&P 500 and Nasdaq falling into a correction zone
Inflation in the United States accelerated in September, and the market expects the Federal Reserve to remain stagnant next week
JPMorgan Chase's CEO will sell off the bank's stock for the first time since taking office
With the resurgence of recession panic in the market, US stocks rose and fell on Friday, with the Dow falling more than 350 points and the S&P 500 index entering a correction zone. Among them, the Dow hit its lowest level since March 28th, while the S&P 500 index fell 10.3% from its high on July 31st this year. The Nasdaq entered a correction zone on Wednesday and at one point this week, it experienced its largest daily decline since February.
In terms of individual stocks, the company's stock fell more than 3% and pressured the Dow to decline due to news of the CEO's stock selling plan. Meanwhile, the rise in Amazon's stock price boosted the Nasdaq.
As of the close, the Dow fell 366.25 points, or 1.12%, to close at 32417.59 points; The Nasdaq rose 47.41 points, or 0.38%, to close at 12643.01 points; The S&P 500 index fell 19.86 points, or 0.48%, to 4117.37.
The three major stock indices closed lower throughout the week. The Dow has fallen 2.1% this week, the Nasdaq has fallen 2.6%, and the S&P 500 has fallen 2.5%.
In terms of sectors, the energy and communication services sectors of the S&P 500 index led the decline, with losses exceeding 6% this week. Among them, Charter Communication and Google's parent company's stock prices led the decline this week, both falling by over 10%. Chevron and Hess in the energy sector led the decline in the sector, with losses of over 10%.
In the bond market, with the release of key inflation data, the trend of US bond yields remained flat. The 10-year US Treasury yield fell by approximately 1 basis point to 4.832%, while the two-year US Treasury yield fell by approximately 3 basis points to 5.01%.
US inflation accelerated in September
In terms of economic data, according to data released by the US Department of Commerce, inflation accelerated in September, but at the same time consumer spending remained stronger than expected. The inflation indicator that the Federal Reserve is concerned about, the core PCE price index, rose 0.3% month on month in September, which is in line with market expectations and ahead of the expected level; A year-on-year increase of 3.7%, lower than August's 3.8%, but still higher than the Federal Reserve's inflation target of 2%. The PCE price index, including volatile food and energy prices, increased by 0.4% month on month and 3.4% year-on-year.
Despite rising prices, personal expenses continued to rise in sync, rising 0.7% month on month, exceeding expectations by 0.5%. Personal income increased by 0.3%, which was 0.1% lower than expected.
This is the last inflation data before the Federal Reserve's policy meeting next week. According to the CME Federal Reserve observation tool, the market still expects a 97.4% probability of the Federal Reserve not moving at its November 1 meeting and a 2.6% probability of a 25 basis point rate cut. Federal Reserve Chairman Powell stated in New York last week that the current rise in bond yields is causing financial conditions to tighten, and the surge in borrowing costs may replace further interest rate hikes by the Federal Reserve. But he also stated that additional evidence of economic growth may further increase the risk of inflation, leading to further interest rate hikes.
According to data released by the University of Michigan, the final inflation expectation in the United States increased in October. Consumer expectations for inflation in the next year have risen to 4.2%. The consumer confidence index has been raised to 63.8, but it is still below the September level.
JPMorgan Chase's CEO will sell off the bank's stock for the first time since taking office
On the company side, according to regulatory documents, J.P. Morgan CEO Jamie Dimon plans to gradually sell off 1 million shares of the bank, worth approximately $141 million, starting next year. This is his first such transaction in nearly 18 years of service at the bank. Damon currently holds approximately 8.6 million shares of JPMorgan Chase's stock, as well as outstanding additional stock grants. Although he sold his stocks for financial diversification and tax planning purposes, he still put pressure on the bank's stock price. JPMorgan Chase's stock price closed down 3.6% on Friday at $135.69 per share.
Amazon's stock price closed up 6.83% at $127.74 per share. The company released its latest results on Thursday, earning 94 cents per share in the third quarter and achieving revenue of $143.1 billion, both exceeding market expectations. Among them, revenue increased by 13% year-on-year, reflecting signs of acceleration in the company's business after facing challenges due to inflation and rising interest rates in 2022. Amazon expects sales to be between $160 billion and $167 billion in the fourth fiscal quarter, including holidays.
Driven by better than expected financial results, Intel's stock price closed up 9.29% on Friday at $35.54 per share, indicating signs of recovery in the personal computer market. The CEO of the company, Pat Gelsinger, also stated that the company is expected to reduce costs by $3 billion this year.
Affected by the bearish financial report, Ford Motor's stock price closed down 12.25% at $9.96 per share, a 52 week low. Ford's profit and revenue in the third quarter did not meet expectations, and stated that its demand for electric vehicles also fell short of expectations.
As of now, nearly 40% of companies in Europe and America have released quarterly financial reports. JPMorgan Chase stated that among the companies that have already released performance, American companies have performed better than European companies. Among the S&P 500 index companies that have released financial reports, 78% of companies have exceeded expectations in earnings and achieved an annual profit growth of 12%. In contrast, only 57% of Stoxx 600 constituent companies have achieved profit expectations.
In the commodity market, gold futures for December delivery on the New York Mercantile Exchange rose 0.1% on Friday, closing at $1998.50 per ounce. Affected by the situation in the Middle East, oil prices rose on Friday, with WTI and Brent oil prices hitting new weekly highs. The WTI crude oil futures for delivery in December rose 2.8% to close at $85.54 per barrel, but they still fell 2.9% this week. The Brent crude oil futures for December delivery rose 2.9% to close at $90.48 per barrel, with a cumulative decline of 1.8% this week.