This past week, the NASDAQ led the major indices, while the Dow underperformed. Overall, the market was fairly balanced. The much-anticipated FOMC meeting concluded with the Federal Reserve officially beginning its rate-cutting cycle, settling the debate between a 25 or 50 basis point cut. The Fed opted for a 50bps cut, and that decision, coupled with stronger-than-expected economic data, helped to ease recession fears for now. As a result, equities posted gains across the board, and commodities also saw strong bids, likely reflecting the market's interpretation that a larger rate cut, combined with improving economic conditions, could temper growth concerns for the time being. However, if the economic data continues to improve and inflation shows signs of stabilizing, the conversation could quickly shift from recession risks to rising inflation.
Looking Ahead:
Next week is relatively quiet on the economic front, with the most significant event being the release of the Personal Consumption Expenditures (PCE) data on Friday. In addition, we have scattered economic reports throughout the week, and Federal Reserve Chair Jerome Powell is expected to speak on Thursday, coinciding with the release of the second-quarter GDP numbers. As we approach the end of the quarter, the market may experience some choppiness ahead of these key data releases later in the week.
SPY Outlook:
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