On Tuesday, the Flash Manufacturing and Flash Services PMI reports were made public. The Flash Manufacturing PMI came in at 52.4, which was higher than the projected 51.5 and was higher than last month’s reading of 51.6. This indicates that the manufacturing sector is growing. The Flash Services PMI also indicated that the service sector was expanding as it came in at 51.1. However, this was lower than last month’s reading of 51.7 and lower than the 52 figure projected by analysts prior to the release.
On Thursday, unemployment claims data was released, and in the last seven days, there were 210,000 requests for benefits. This was roughly in line with projects and only slightly higher than the 205,000 requests for benefits a week ago.
Friday saw the release of the revised inflation expectation and consumer sentiment reports from the University of Michigan. Respondents said that inflation would likely be at 3.8 percent a year from now, which is up from 3.4 percent last month. Consumer sentiment came in at 53.3 compared to an expected 53.9.
The war with Iran created intense volatility in equity and commodities markets throughout the week. Markets made especially large moves on Monday morning as President Trump announced that he would not move to strike Iranian power plants.
The S&P 500 jumped about 250 points in a span of just a few minutes after the announcement. Other major indexes followed suit while gold and currencies such as the Australian dollar also jumped quickly. Meanwhile, the price of West Texas Intermediate (WTI) oil dropped from about $100 a barrel to about $85 on Monday morning.
However, the price of WTI rebounded to close Friday’s session back near $100 a barrel while the equity markets ended the week lower. Equity markets were weighed down by a lack of funding for the Department of Homeland Security (DHS), which oversees the Transportation Security Administration (TSA). This has resulted in disruptions to commerce as well as the loss of income for thousands of TSA agents, which have a ripple effect on the overall economy.
The S&P 500 lost 3.6 percent this week to close at 6,368. This was a loss of 237.7 points for an index. Over the past five trading days, the market made a peak of 6,614 on Wednesday and closed at its weekly low on Friday.
The Dow lost 2.65 percent this week to close at 45,166, which represents a loss of 1,261 points over the past five days. Over the past month, the index has lost 7.66 percent and is close to being in correction territory. For the week, it reached a high of 46,683 on Wednesday and closed near its weekly low on Friday.
Finally, the Nasdaq lost nearly 5 percent this week to close at 20,948, which was a loss of 1,071 points since Monday. On Friday, the index lost 2.15 percent as traders grappled with a possible AI bubble and other factors weighing against tech companies. The weekly high of 22,173 occurred early Monday morning while the low occurred on Friday afternoon.
The upcoming week will be another interesting one for market participants as there will be a lot of news to digest. On Tuesday, the JOLTS report comes out, while Wednesday sees the release of the ADP nonfarm payroll report. Retail sales data also comes out on Wednesday morning while the Bureau of Labor Statistics (BLS) releases its version of the nonfarm payroll report on Friday. Unemployment claim data will be made public on Thursday morning as usual.