Stocks ended the volatile week with relatively small losses as Friday’s rebound helped reverse three days of declines. The S&P 500 (SPX) fell 0.31%, the Nasdaq-100 (NDX) lost 0.50%, and the Dow Jones Industrial Average (DJIA) inched down 0.15%, snapping their three-week winning streak.
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Each of the major U.S. stock indexes set record highs on Monday, but on Tuesday traders drove stocks down as Fed Chair Jerome Powell offered no hints on further monetary policy in his post-policy-meeting speech. Comments from several other Fed officials added to negative sentiment, signaling a more tempered approach to easing than investors were hoping for. The tech sector remained volatile. Performance among large and megacaps was mixed, as investors fretted over elevated valuations – particularly in AI-related names – and concerns over tariffs resurfaced.
President Donald Trump unveiled a fresh round of punishing tariffs on a broad range of imported goods, including duties on branded drugs and levies on heavy-duty trucks, which are coming into effect this week. At the same time, media reports revealed that the White House is doubling down on reshoring semiconductor manufacturing, planning to introduce a 1:1 rule requiring chipmakers to match domestic and imported production – after a grace period to ready their U.S. plants – or face punishing tariffs.
U.S. stocks bounced Friday as core PCE inflation data matched expectations, reinforcing hopes for more Federal Reserve rate cuts. Meanwhile, the U.S. economy is still firing on all cylinders, with second-quarter annualized GDP growth revised to 3.8% from 3.3%, driven by solid consumer spending. The revision marks a sharp turnaround from Q1’s slight contraction. Personal income and spending data also surprised to the upside, pointing to continued momentum in the current quarter.
By contrast, the UoM consumer sentiment index declined in September for the third consecutive month, with households increasingly concerned about inflationary pressures and labor market weakness. While inflation appears contained, despite tariff-related headlines, the labor market remains an evolving narrative. The jobs report on Friday will be an important datapoint and could directly shape the Fed’s next move.
Worries over a potential government shutdown on October 1 added to investor jitters. Historically, shutdowns have had only short-lived economic impact. The bigger risk lies in delays in publishing essential data – such as the next jobs report and inflation indexes – ahead of the next Fed meeting, raising the possibility that no decision will be made even as markets hope for more cuts.
Three Economic Reports
Here are three key economic reports that could affect your portfolio this week. For a full listing of additional economic reports, check out the TipRanks Economic Calendar.
» September ISM Manufacturing PMI – Wednesday, 10/01 – This report shows business conditions in the U.S. manufacturing sector and serves as a significant indicator of overall economic conditions. PMIs are considered one of the most reliable leading indicators for assessing the state of the U.S. economy, helping analysts and economists anticipate changing economic trends.
» September ISM Services PMI – Friday, 10/03 – This report reflects business conditions in the U.S. services sector, which contributes over 70% of the U.S. GDP. PMI indices are leading economic indicators used by economists and analysts to gain timely insights into changing economic conditions, as the direction and rate of change in the PMIs usually precede changes in the overall economy.
» September Nonfarm Payrolls and Unemployment Rate – Friday, 10/03 – The Nonfarm Payrolls and Unemployment reports represent the number of new jobs created during the previous month, along with the percentage of people actively seeking employment in the previous month. These reports are two of the most important economic indicators, as the shift in the number of positions is strongly associated with the overall health of the economy. One of the Federal Reserve’s mandates is full employment, and it considers labor market changes when determining its policy decisions.
For more exclusive market insights and content from TipRanks Macro & Markets research analyst Yulia Vaiman, click here.