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Wall Street Close: S&P 500 and the Dow Jones finished the week with gains, the Nasdaq down in a rowdy week

  • The Dow Jones and the S&P 500 finished the day with gains of 0.1% each, while the Nasdaq was unchanged.
  • Evergrande’s uncertainty will carry on throughout the weekend.
  • Stocks rose, despite the new Federal Reserve hawkishness.
  • Nike fell 6.5%, claiming supply chains crunch and high freight shipping prices.

Two of the three major US stock exchanges ended the week in the front foot. The Dow Jones Industrial Average (DJIA) rose 0.1%, to close at 34,798. The S&P 500 added 0.1% finished the day at 4,455.48, whereas the Nasdaq Composite slid less than 0.1% settled at 15,047.70.

Surprisingly, the Dow Jones and the S&P 500 ended the week with gains amid uncertainty surrounding the indebted real-estate giant Evergrande Group. At the start of the week, equities sold off in the outcome of Evergrande’s default could spill over the financial markets. 

Nevertheless, on Wednesday, Evergrande Group calmed the markest with a press release that said they would pay the yuan-denominated bonds, leaving US dollar bond-holders in limbo. As the news was released, investors seized the opportunity to buy the dip.

Additionally, the Federal Reserve unveiled its monetary policy statement and its Summary of Economic Projections, also known as SEP.  The Fed left the rates and its bond asset purchasing program unchanged. However, a subtle change in the monetary policy statement opened the door for the so-called bond tapering process. Further, inside the SEP, the famous dot-plot revealed that half (9) of the FOMC members saw the need to increase the rates in the second—half of 2022, adding more fuel to the already hawkish statement. Despite the aforementioned, US stocks held to their own and rallied for three consecutive days.

That said, the Dow and the S&P finished the week with gains of 0.5% and 0.6%, each, while the heavy-tech Nasdaq barely changed.

Moving to stocks, Nike dropped 6.5% after warning of possible delays during the holiday’s shopping season, blaming a supply chain crunch.  In line with Nike, Foot Loker shed 7.2%.

Further, the US Dollar Index finished the day at 93.27, up 0.19%, while the US 10-year Treasury yield rose four basis points (bps), ending the week at 1.453%, the highest level since July 2.

In commodity markets, gold (XAU/USD) rose 0.45%, closed at $1,750 troy ounce, while crude oil Western Texas Intermediate (WTI) finished at $73.85 per barrel, up almost 1%.

In the Crypto environment, Bitcoin is trading at $42,956.85 at the time of writing, down 4.28% weighed by news from China, specifically the PBoC, saying that cryptocurrency-related transactions are illegal.
 

Author

Christian Borjon Valencia

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

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