The S&P 500 index edged up 0.5% last week, starting the new month and quarter on a slightly more positive note following four consecutive weeks of losses.
The index is still in positive territory for 2023, with a 12% year-to-date rise.
The slight weekly gain comes just after the S&P 500 closed out its toughest quarter of the year. The index fell 3.6% in Q3, marking its first quarterly loss since Q3 of 2022, amid rate policy concerns. The S&P 500 had climbed in the first half of 2023 on optimism for the Federal Open Market Committee to stop raising rates, but investors are now bracing for another potential increase.
September nonfarm payrolls released Friday showed last month’s US nonfarm payrolls jumped more than expected despite higher interest rates and elevated inflation. Investors believe the stronger-than-expected payrolls could prompt the FOMC to raise rates again to continue fighting inflation.
However, wage growth came in lighter than expected. Also, the September unemployment rate remained at 3.8%, slightly higher than the 3.7% rate expected, as the labor force grew only modestly. Both data points could lessen the case for the FOMC to raise rates in November.
Amid the mixed signals, investors will be looking closely at September inflation data due this week for more signs of the FOMC’s next potential move.
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