What Happened Last Week

The Dow Jones Industrial Average gained 2.60 percent. The S&P 500 Index gained 4.02 percent. The Nasdaq Composite gained 5.95 percent.^1,2

Stocks Rally Ahead Of Fed Meeting

Stocks bounced out of the gate at the start of the week as “risk on” investors made moves before the pending release of the twin inflation reports–the Consumer Price Index (CPI) and Producer Price Index (PPI). The three major averages added slightly more than 1 percent in Monday trading.³

On Wednesday, stocks initially dipped following the release of the CPI as traders appeared disappointed by the report. By midday, sentiment changed. The S&P 500, down as much as 1.6 percent in early trading, gained 1.1 percent by the closing bell. More inflation data out Thursday showed wholesale price increases were tempered, which helped stocks move higher through the balance of the week.^4,5

Small Caps Tipping The Fed's Hand?

Small-cap stocks, as measured by the Russell 2000 Index, have pushed higher in recent weeks, which is a telling move for some Wall Street observers. The Russell 2000 has outperformed the S&P 500 by more than 4 percent during Q3 so far.⁶

One reason is that smaller stocks tend to respond when they anticipate interest rates will trend lower. Investors appear to be positioning themselves in small cap issues, expecting the Fed may adjust rates at its September meeting as it looks to guide the economy to a soft landing.⁷

Economic Data To Watch

Monday: Empire State Manufacturing Index.

Tuesday: FOMC meeting – Day 1. Retail Sales. Industrial Production. Fed Official Lorie Logan speaks.

Wednesday: FOMC meeting – Day 2. Housing Starts and Permits. FOMC Announcement. Fed Chair Press Conference.

Thursday: Existing Home Sales. Weekly Jobless Claims.

Friday: Fed Official Patrick Harker speaks.

^{Source: Investors Business Daily - Econoday economic calendar; September 13, 2024
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.}

Upcoming Earnings Reports

Wednesday: General Mills, Inc. (GIS)

Thursday: FedEx Corporation (FDX)

^{Source: Zacks, September 13, 2024
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.}

Footnotes and Sources

^{1. The Wall Street Journal, September 13, 2024}

^{2. Investing.com, September 13, 2024}

^{3. The Wall Street Journal, September 10, 2024}

^{4. The Wall Street Journal, September 11, 2024}

^{5. CNBC.com, September 12, 2024}

^{6. The Wall Street Journal, September 13, 2024}

^{7. MarketWatch.com, September 12, 2024}

^{Source: YCharts.com, September 14, 2024. Weekly performance is measured from Monday, September 9, to Friday, September 13. TR = total return for the index, which includes any dividends as well as any other cash distributions during the period. Treasury note yield is expressed in basis points}