US Stock Market Closes Volatile Week on Muted Note Amid Inflation Worries
The US stock market closed a volatile week on a muted note as benchmark Treasury yields topped 5%, and crude prices reversed earlier gains but remained above $100 per barrel, keeping inflation worries at the forefront.
A semiconductor rally boosted the Nasdaq and S&P 500, but broader weakness pulled the Dow to a lower close. The S&P 500 ended with a nominal weekly loss, while the tech-laden Nasdaq closed higher than last Friday's finish.
Chuck Carlson, CEO of Horizon Investment Services, said investors are trying to figure out the short- and long-term implications of the Federal Reserve's interest rate hike on equities and fixed-income investments. He also mentioned a reluctance to be positioned in any directional way going into the weekend due to potential exogenous events.
Financial markets are currently pricing in a 55.4% probability of another Fed rate hike at its October meeting, up from 42.5% last Friday. Central banks around the globe have embarked on a policy-tightening cycle to rein in inflation fueled by the Iran war.