The S&P 500 financials sector added 2% in the session and secured a record closing high. Not faring as well was Tesla, which was down over 12% for the week as its robotaxi event failed to impress investors. Alphabet was also under pressure on news that the Department of Justice was exploring a possible break-up of Google.
For the week, the S&P 500 added 1.1%, ending at an all-time high. Also securing a fresh record was the Dow Jones Industrial Average, up 1.2%. The tech-heavy Nasdaq Composite also neared its previous peak, adding 1.1%. Economic data for the week was mixed, with weekly jobless claims unexpectedly rising to 258,000, and the University of Michigan’s consumer sentiment index dropping to 68.9 in October, from 70.1 previously. Perhaps the most attention was on the release of the consumer price index, which increased 0.2% last month, slightly ahead of expectations. This fuelled expectations that the Federal Reserve will cut rates by 25 basis points at its November meeting, with just a 12% chance of it remaining on hold, according to CME’s FedWatch. For the week, Treasury yields rose, with the 10-year note ending at 4.08%.
European markets managed to see weekly gains, with the STOXX 600 adding 0.7%. Comments from some European Central Bank officials seemed to indicate that the central bank could quicken its pace of policy easing. The ECB meets this week and markets are expecting a 25bps rate cute, as well as another move at its December meeting. Most regional indices logged gains, however the UK FTSE 100 ended 0.3% lower. This was even as UK GDP grew 0.2% in August, having flatlined in the prior two months.
Japan’s Nikkei 225 rose 2.5% for the week, while the broader Topix only managed to see a 0.5% rise. The markets were supported by yen weakness. After the strong gains seen in the previous couple of weeks, Chinese equities saw a pullback as optimism around the stimulus measures faded. Markets were however expectant of further details around stimulus plans being unveiled over the weekend. In a holiday shortened week, the Shanghai Composite fell 3.6%. Losses in Hong Kong were even worse with the Hang Seng down 6.5%.