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The S&P 500 gained 1.01% on Friday, closing August with a 2.3% rise, marking its fourth consecutive winning month. This recovery, driven by consumer staples, real estate, and health care, followed a global sell-off earlier in the month. Meanwhile, the Dow Jones Industrial Average hit a record high, climbing 0.55% to close at 41,563.08, and the Nasdaq Composite rose 1.13%, reflecting cautious optimism in the tech sector.
With inflation stabilizing, attention is shifting to job data as the key factor in upcoming Federal Reserve policy decisions.
Premarket Movers:
| Company | Stock Change | Details |
|---|---|---|
| Tesla (NASDAQ:TSLA) | +0.7% | Best month in China for the year so far in August, benefiting from brisk sales in smaller cities. |
| Nio (NYSE:NIO) | +0.5% | Delivered over 20,000 vehicles in August, up about 4% from last year. |
| United States Steel (NYSE:X) | -5.9% | Kamala Harris signaled she would block a proposed $14.9 billion takeover by Japan's Nippon Steel. |
| Boeing (NYSE:BA) | -3.5% | Wells Fargo downgraded the planemaker to ‘underweight’ from ‘equal weight’ due to potential equity dilution. |
| Unity Software (NYSE:U) | +5.5% | Morgan Stanley upgraded it to ‘overweight’ from ‘equal weight’ after a period of underperformance. |
| Intel (NASDAQ:INTC) | -1.2% | CEO Pat Gelsinger is set to present a strategic overhaul to its board aimed at streamlining operations and cutting costs. |
Inflation and Jobs: A Shift in Focus
July saw a slight increase in inflation, with the personal consumption expenditures (PCE) price index rising 0.2% from the previous month and 2.5% year-over-year. These figures aligned with consensus estimates, indicating a steady but controlled rise in inflation. Core PCE, which excludes volatile food and energy prices, also increased by 0.2% in July and 2.6% over the past year. This was slightly below the expected 2.7%, signaling that inflation pressures might be easing.
However, the focus is now shifting from inflation to employment data as the key determinant of Federal Reserve policy. Citi (NYSE:C) analysts have noted this pivot, emphasizing that upcoming jobs data will play a crucial role in shaping the Fed's next moves.
Citi analysts project that the upcoming Non-Farm Payroll (NFP) report will show an addition of 125,000 new jobs, with the unemployment rate holding at 4.3%. This projection suggests a softening labor market, which could prompt the Federal Reserve to cut interest rates by 50 basis points. If the unemployment rate dips slightly to 4.2%, Citi expects a smaller, 25 basis point rate cut.
