Market Recap: Nasdaq and S&P 500 Rise, Dow Declines
US equity markets had a mixed session on Tuesday, September 10. The Nasdaq Composite Index gained 0.84%, and the S&P 500 rose 0.45%, driven by strength in tech stocks. In contrast, the Dow Jones Industrial Average fell by 0.23%, weighed down by declines in bank stocks amid concerns about upcoming earnings.
Bank Stocks Under Pressure: Investors Eye Presidential Debate and CPI Report
Bank stocks dragged on the Dow as investors braced for the Harris-Trump Presidential Debate and the impending U.S. CPI report. Concerns about the earnings outlook for banks added to the sector’s weakness, reflecting broader caution ahead of crucial economic data and political developments.
Presidential Debate Impact: Betting Odds Shift in Favor of Harris
The Harris-Trump Presidential Debate influenced betting markets, with Polymarket showing an equal likelihood of either candidate winning. During the debate, Harris’s odds increased by 3%, while Trump’s fell by 3%, highlighting the debate’s impact on market sentiment and investor positioning.
CPI Report Looms: Key Inflation Data to Guide Fed Policy
The U.S. CPI report due Wednesday is expected to play a pivotal role in shaping expectations for the Federal Reserve’s rate path. Economists forecast that the annual inflation rate will decrease from 2.9% in July to 2.6% in August. Softer-than-expected inflation figures could bolster hopes for a significant 50-basis point rate cut by the Fed in September, potentially boosting demand for riskier assets as lower borrowing costs encourage investors to seek higher returns.
The CPI data will be crucial in assessing the Fed’s next move and could drive volatility in equity and fixed-income markets as traders react to the evolving economic outlook.
