The Dow Jones Industrial Average dropped 1.7% last week, hitting a three-month low alongside the small-cap Russell 2000. The Nasdaq and S&P 500 held up better, both finishing above their 50-day moving averages as a hawkish Fed rate hike gave way to a late-week rebound in growth stocks.
The Dow Jones Industrial Average lost 1.7% last week, touching a three-month low. The small-cap Russell 2000 shed 1.5% over the same stretch, hitting the same three-month low. Dow, S&P 500 and Nasdaq futures open at 6 p.m. ET Sunday for the new trading week.
Fed rate hike jolts stocks, then a rebound
Stocks slumped Wednesday on the Federal Reserve rate hike and hawkish guidance. They rebounded broadly Thursday in a second-day reaction to the decision. The indexes finished narrowly mixed Friday as the 10-year Treasury yield moved back toward 19-year highs. Earlier in the week, AI stocks tumbled Monday after some big AI leaders called for a development slowdown, though software surged as a result.
For the week, the Nasdaq rose 0.7% while the S&P 500 dipped 0.1%, both finishing above their 50-day moving averages. The Invesco S&P 500 Equal Weight ETF, by contrast, fell 1.2% for a fifth straight weekly decline, pointing to narrow leadership beneath the headline indexes.
Yields and oil frame the backdrop
The 10-year Treasury yield rose two basis points to 4.995%, while the 30-year yield fell three basis points to 5.33%. The two-year yield, closely tied to the interest rate outlook, jumped 10 basis points to 4.74%. U.S. crude oil futures rose 0.25% to $100.30 a barrel for the week but came well off their weekly highs as Saudi supply disruptions appeared less severe than originally thought.
What comes next
Earnings and economic data will be light in the coming week, but the Mideast conflict — and its impact on oil prices and Treasury yields — remains front and center. President Donald Trump's meeting with Chinese President Xi Jinping on Sept. 24 is also on investors' radar.
Source: Investor's Business Daily
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