On Friday, stocks experienced a slight uptick amidst growing concerns that the Federal Reserve might implement steeper rate hikes than previously anticipated.

The S&ampP 500 broke its three-day descent, inching up by 0.14% to close at 4,457.49. The Dow Jones Industrial Average advanced by 75.86 points, marking a 0.22% rise, settling at 34,576.59. Meanwhile, the Nasdaq Composite secured a marginal increase of 0.09%, ending the day at 13,761.53.

However, it wasnU+02019t all positive news, as the week saw the major indices in the red. The S&ampP and Nasdaq declined by 1.3% and 1.9%, respectively, marking their first weekly drop in the past three weeks. The Dow rounded off the week with a decline of approximately 0.8%.

The latest economic indicators, notably the initial jobless claims coming in below expectations, have sparked renewed apprehension about potential rate hikes. As of Friday, market participants, as per CME Group’s Fed Watch tool, are estimating over a 40% likelihood of a rate bump in November, following an expected hold in September.

 

AppleU+02019s Upcoming Showcase

On Tuesday, Apple (NASDAQ: AAPL) is set to host its signature fall event. Enthusiasts anticipate the debut of several new gadgets, including the iPhone 15, iPhone 15 Pro, Apple Watch Series 9, and Ultra 2, along with other tech innovations.

AAPL stock is down 6% in the last two trading sessions as China banned the use of iPhones by government officials. China is the second largest market for Apple, and sales in this region have tripled in the last ten years.

 

Inflation Insights Incoming

The upcoming week begins with an updated snapshot of inflation. Due Wednesday, the Consumer Price Index (CPI) figures suggest a monthly jump of 0.4% - the steepest since January. 

Year-over-year, itU+02019s predicted to surge 3.4%, a tad higher than July’s 3.2%. The core CPI, steering clear of fluctuating food and energy costs, is forecast to increase by 0.2% monthly and 4.3% annually, marking a two-year low and a drop from JulyU+02019s 4.7%.

Thursday brings the Producer Price Index (PPI) from the Bureau of Labor Statistics, which provides insight into manufacturers and wholesalersU+02019 inflationary pressure. Predictions show a 0.4% monthly increase, a slight bump from JulyU+02019s 0.3%, and a yearly rate of 1.3%, surpassing July’s 0.8%. 2

 

Retail Report for August

The U.S. Census Bureau will shed light on AugustU+02019s retail sales this Thursday. Sales, displayed without inflation adjustments, are believed to have risen by 0.4%, a dip from July’s 0.7%. It suggests a consistent five-month growth trend, indicating consumers are still spending despite mounting borrowing costs and continued inflation.

 

ECBU+02019s Rate Rundown

On Thursday, the European Central Bank (ECB) convenes for a pivotal monetary policy discussion. After nine consecutive rate increases since last summer, a pause is expected this time around. Emulating the U.S. Federal ReserveU+02019s aggressive stance, the ECB has been proactive against inflation, elevating its foundational deposit rate to a two-decade high of 3.75% from an all-time low of -0.5% in early 2022.

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