Stocks slipped as the technology sector remained under pressure and a mid-week announcement by the Federal Reserve failed to inspire investors.
The Dow Jones Industrial Average declined 0.03%, while the Standard & Poor’s 500 fell 0.64%. The Nasdaq Composite index dropped 0.56% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, rose 0.75%.1,2,3
Technology Pulls Stocks Lower
Merger and acquisition activity announced at the start of the week generated a rush back into technology stocks, sparking a rebound from the previous week’s drop. Stocks continued to advance until Wednesday, when investors began to digest comments from the Fed’s Federal Open Market Committee meeting. The Fed delivered a message that coupled assurances of continued low rates with concerns about the health of the economic recovery.4
The Fed Stays the Course
Most Fed officials do not see this happening until 2023.
While the Fed maintained its view on the importance of fiscal stimulus to help American workers and businesses, it did improve its outlook for unemployment in its latest economic outlook. The Fed now expects unemployment would average around 7-8% in the final three months of the year, down from its June prediction of around 9-10%.6
THIS WEEK: KEY ECONOMIC DATA
Source: Econoday, September 18, 2020
THIS WEEK: COMPANIES REPORTING EARNINGS
Source: Zacks, September 18, 2020
1. The Wall Street Journal, September 18, 2020
2. The Wall Street Journal, September 18, 2020
3. The Wall Street Journal, September 18, 2020
4. The Wall Street Journal, September 16, 2020
5. The Wall Street Journal, September 16, 2020
6. The Wall Street Journal, September 16, 2020
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Weekly Market Insights: Tech Sector Slip Continues
September 23, 2020