On Tuesday, September 12, 2023, the major U.S. stock indices closed lower, with the S&P 500 down 0.32%, the Dow Jones Industrial Average down 0.34%, and the Nasdaq 100 down 0.33%. Contributing factors included rising crude oil prices, which increased inflation expectations amid uncertainty over the reopening of the Strait of Hormuz, and hawkish remarks from Chicago Fed President Austan Goolsbee regarding inflation as a significant economic concern.
Crude oil prices rose more than 1% to a one-week high due to escalating tensions involving Iran and U.S. sanctions, while inflation expectations were buoyed by a dip in 10-year Treasury yield to 4.68%. Economic news was mixed; existing home sales fell by 1.7% month-over-month to 4.06 million, closely aligned with expectations. Earnings reports for Q2 indicate a potential growth rate of nearly 32% for the S&P 500, outperforming earlier projections of 23%.
In the markets, notable movers included a decline in software stocks like Datadog and Adobe, while chipmakers and AI-infrastructure stocks showed strength, with Nvidia leading a $500 billion funding commitment. The markets currently anticipate a 51% chance of a 25 basis point rate hike at the Federal Open Market Committee meeting scheduled for September 15-16.
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