The financial markets showcased a calm demeanor last week, with minor declines in the S&P 500 and Nasdaq Composite of 1.2% and 1.5% respectively. Despite these slight drops, overall market performance remained stable, and volatility continued its lower trajectory. The upcoming week is expected to be significant due to the Federal Reserve meeting, where it is widely anticipated that interest rates will remain unchanged.
In September, the S&P 500 and Nasdaq Composite experienced a marginal pullback, registering a decrease of about 1.3% and 2.3% respectively. Tech behemoths Apple (NASDAQ:AAPL) and Nvidia (NASDAQ:NVDA) also encountered a slump in their share prices, with Apple's shares plummeting nearly 7%, and Nvidia's shares dropping by 11%. Concurrently, there has been a rise in interest rates and oil prices. The two-year yield now stands at 5.05%, while the ten-year yield is nearly at 4.33%, marking the highest levels in over a decade.
Crude oil futures have continued their upward trajectory, exceeding $91 in premarket trading and nearing their annual high. Rising oil prices are often associated as a potential trigger for inflation.
This week will also witness the Federal Reserve Open Market Committee (FOMC) meeting, where a decision on interest rates is expected to be announced on Wednesday. Current projections from CME suggest a 99% probability that rates will remain steady this month and a 69% chance they will stay unchanged at the Fed's November meeting. Alongside the domestic Fed meeting, international central banks including the Bank of England and Bank of Japan are also scheduled to meet this week.
In other news, United Auto Workers (UAW) are now into their fourth day of targeted strikes at major automakers. Negotiations are set to continue this week as both parties remain far apart on a deal. Over the weekend, UAW President Shawn Frain rejected an offer from Stellantis (NYSE:STLA) for a 21% pay increase, holding out for a 40% increase instead.
In the tech sector, grocery delivery company Instacart is expected to price its IPO after market close today, targeting a $9B valuation. Trading of the shares is anticipated to commence tomorrow. Meanwhile, FedEx (NYSE:FDX) is slated to release its latest earnings report on Wednesday after market close. The report will be closely watched for projections related to the upcoming holiday season, as FedEx often serves as a bellwether for online shopping trends.
Lastly, data on Existing Home Sales is due for release on Thursday. The market has been tight with many homeowners choosing to stay put rather than risk higher mortgage interest rates by moving. The release of these numbers is not expected to yield any surprises.
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