Amid the whirlwind of economic movements that plagued the last week, the US financial market demonstrated noteworthy resilience. Monday began with the Nasdaq standing out, demonstrating its vigor in the new quarter and gaining a green point amid a challenging scenario.
The performance of the other indices was not so optimistic: the S&P 500 fell 0.4%, while the Dow Jones fell 0.6%. But why has the Nasdaq done so well? Well, it looks like Goldman Sachs strategists have an idea, as they pointed out that technology sector valuations were attractive.
Everything could have been very different if the US Congress had not intervened last Saturday. They reached a deal avoiding a government shutdown that, until then, seemed to be a certainty. Such a move brought a sigh of relief to investors, who feared potential negative impacts on the economy and the stock market. However, the celebrations may be temporary, as the budget issue only received a pause, not a resolution.
While financial markets digest this decision, they also have other challenges to face. The Federal Reserve’s recent announcement indicating that interest rates will remain high certainly did not go unnoticed by investors. Additionally, rising oil prices and Treasury yields are increasing pressure on the market.
On the other hand, recent moves around US financing could suggest a new scenario in which the Fed considers rate hikes in November. Traders pay attention!
In the automobile sector, things seem to be moving towards balance. The United Auto Workers strike that affected several Ford and GM plants may be nearing an end. The recent negotiation between the UAW and Mack Trucks on Sunday could be indicative of better days in sight.
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