US Stocks End Mixed Amid Slowing Inflation and Interest Rate Cut Speculation

The US stock market ended on a mixed note on the 27th, with the Dow Jones Industrial Average reaching an all-time high, while the S&P 500 and Nasdaq Composite Indexes declined. The market’s mixed performance was driven by slowing inflation and speculation of interest rate cuts.

The Dow Jones Industrial Average closed at 42,313.00, up 137.89 points (0.33%) from the previous day, breaking an all-time high. The S&P 500 index ended trading at 5738.17, down 7.20 points (0.13%) from the previous day, and the Nasdaq Composite Index ended trading at 18,119.59, down 70.70 points (0.39%) from the previous day.

Slowing Inflation and Interest Rate Cut Speculation

According to the US Department of Commerce, the US personal consumption expenditures (PCE) price index increase rate in August was 0.1% compared to the previous month and 2.2% compared to the same period last year. This figure is lower than the increase rate in July (2.5% compared to the same period last year) and also fell short of the market expectation of 2.3%.

Art Hogan, chief market strategist at B Riley Asset Management, expressed the view that “(in response to the trend of slowing inflation), the US Federal Reserve will continue to cut interest rates to support a soft landing for the US economy.” At the Federal Open Market Committee (FOMC) in November, speculation grew stronger that the Federal Reserve would decide to cut interest rates by 0.50 percentage points twice in a row.

Market Performance by Industry

By industry, energy showed strength, jumping more than 2%. Utilities also rose by more than 1%. On the other hand, technology lagged by nearly 1%. The remaining industries moved in a flat range.

International Oil Prices Rise

International oil prices rose due to expectations that China’s economic recovery would support global energy consumption. On the New York Mercantile Exchange, West Texas Intermediate Crude Oil (WTI) for November delivery, the front-month contract, closed at $68.18 per barrel, up $0.51 (0.75%) from the previous day.

US Dollar and Treasury Yields Fall

The value of the US dollar fell in the foreign exchange market. The dollar index, which shows the value of the dollar against the currencies of six major countries, was down 0.17% to 100.15. US Treasury yields also fell, with the yield on 10-year US Treasury bonds down 3.5bp to 3.756%.