A look back
- Most major U.S. equity indices ended lower last week, struggling to recover from weakness early in the week sparked by AI safety concerns. Eight of the S&P 500's 11 sectors finished in the red, leaving the index down just 0.1% for the week.
- During a week in which the Federal Reserve (Fed) raised its benchmark interest rate by 0.25%, as was widely expected, U.S. Treasury yields moved higher, led by the short end of the curve. The 2-year Treasury yield rose 0.13% to 4.75%.
- In a unanimous vote, the Fed delivered its first rate hike since 2023, striking a more hawkish tone than anticipated, with inflation concerns appearing to be the primary driver of the decision. Looking ahead, 16 of 18 policymakers projected at least one additional rate hike by year-end.
A look ahead
- In a light week for economic data, the White House will be in focus as President Trump addresses the U.N. General Assembly early in the week before hosting China's Xi Jinping for a multi-day visit, capped by a dinner on Thursday with leading technology and finance executives.
- Fed officials return to the public stage this week, and investors will be watching closely for signals about the path of interest rates as policymakers balance inflation and employment objectives.
- Economic releases: August New Home Sales, University of Michigan Consumer Sentiment.
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