U.S. stocks head for down week as interest rate fears rise
Investing.com -- U.S. stocks are rising but still headed for a down week on renewed concerns about the future path of the Federal Reserve’s interest rates.
At 10:50 ET (14:50 GMT), the Dow Jones Industrial Average was up 86 points or 0.2%, while the S&P 500 was up 0.4% and the NASDAQ Composite was up 0.4%.
The major Wall Street indices closed mixed Thursday, with the blue-chip Dow Jones Industrial Average ending almost 60 points, or 0.2%, higher, while the tech-heavy Nasdaq Composite dropped 0.9% and the broad-based S&P 500 fell 0.3%.
Tech stocks hit by rising Fed hike expectations
Stronger-than-expected economic data, including Thursday’s initial jobless claims reading for last week that was lower than expected, has raised concerns that Fed will keep interest rates at elevated levels for longer than previously expected.
This has disproportionately impacted the richly valued tech stocks, with the Nasdaq Composite index down over 2% this week, falling for four straight days.
The Federal Reserve is still widely expected to hold steady on rates when it meets later this month, but this economic resilience suggests that future hikes are not off the table.
Dallas Federal Reserve Bank President Lorie Logan said on Thursday that while "forecasts are inherently uncertain. My base case, though, is that there is work left to do."
Wholesale inventories fell by a more than expected 0.2% for July. The consumer credit reading for July is due out later.
Apple remains in the spotlight
In the corporate sector, Apple (NASDAQ:AAPL) is likely to remain in the spotlight with the world’s most valuable company having seen about $200 billion wiped from its market capitalization in two days on reports of China curbing iPhone use by state employees.
The restrictions point to a potential slowdown in Apple’s iPhone sales, which are the company’s biggest revenue driver. China is also the third-biggest contributor to Apple’s revenue, as of its second-quarter earnings.
Apple is also set to launch its new range of iPhone 15 phones next week.
Grocery chain Kroger (NYSE:KR) posted a loss for the recent quarter after agreeing to pay $1.2 billion to settle claims over the sale of opioid pills. Shares rose more than 4.9%.
Crude set for weekly gains
Oil prices gained on Friday, paring back earlier losses despite lingering concerns over the health of the crucial Chinese economy and a stronger dollar.
The main benchmarks are on course for gains of around 2% this week on the back of the news that top producers Saudi Arabia and Russia have extended their voluntary supply cuts to the end of the year.
Additionally, data released late Thursday showed that U.S. inventories shrank a hefty 6.3 million barrels in the week to September 1, falling for the fourth consecutive week.
(Peter Nurse and Oliver Gray contributed to this item.)
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