On Monday, the S&P 500 Index ($SPX) closed down by 0.33%, the Dow Jones Industrial Average ($DOWI) fell by 0.70%, and the Nasdaq 100 Index ($IUXX) slightly increased by 0.08%. Renewed geopolitical tensions in the Middle East pushed WTI crude oil prices up by over 2%, contributing to a rise in inflation expectations and an increase in the 10-year Treasury note yield to a 19-month high of 4.77%.
Market analysts now project a 65% chance of a 25 basis point interest rate hike at the upcoming Federal Open Market Committee (FOMC) meeting scheduled for September 15-16, a significant increase from 36% before recent remarks by Fed Chair Warsh. Notably, Q2 earnings growth for the S&P 500 is expected to be nearly 32%, surpassing previous projections of 23%.
Overseas markets also showed mixed results, with the Euro Stoxx 50 down 1.01%, while China’s Shanghai Composite rose by 0.85%. As interest rates rise, sectors such as airlines and housing stocks experienced downturns, while energy producers and cybersecurity firms saw gains amid fluctuating crude prices and a rise in Bitcoin.
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