Don’t expect interest rates to drop anytime soon

The S&P 500 hit fresh 2022 lows this week, but posted a historic rally after another disappointing batch of inflation data.

On Thursday, the US Department of Labor announced that the consumer price index rose 8.2% in September, beating economists’ estimates of 8.1%. Core CPI inflation, which excludes volatile food and energy prices, rose 6.6% from economists’ estimates of 6.5%.

The S&P 500 initially fell more than 2% to new 52-week lows and the Nasdaq Composite fell as much as 3.2% on Thursday morning before the market made a historic comeback, with both indexes ending the day up more than 2%. Thursday marked the fifth-largest intraday reversal for the S&P 500 and the fourth-largest intraday reversal in Nasdaq history.

On Wednesday, the Federal Open Market Committee reiterated its commitment to be as aggressive as necessary with monetary policy tightening in its continued efforts to bring inflation down. In the minutes of its September meeting, FOMC members said it would likely be appropriate to hold interest rates higher “for a while” until they see “evidence irrefutable” that inflation is back at 2%.

Semiconductor stocks including ON Semiconductor and LAM Research traded sharply lower this week after the US Commerce Department announced a new set of rules restricting the sale of advanced computer semiconductors to China. New rules to protect US national security and foreign policy interests also require foreign companies to apply for a license to use US tools to produce certain high-end chips sold to China.

After:Student Loan Forgiveness Application Preview Hits Twitter: What It Looks Like

Money in the bank

Shares of JPMorgan Chase traded more than 3% higher on Friday after the big bank reported a third-quarter profit overrun on net interest income growth of 34%.

In the week ahead, the third quarter earnings season heats up with quarterly reports from Bank of America on Monday, Tesla on Wednesday, AT&T on Thursday and Verizon on Friday.

According to FactSet, half of S&P 500 companies that have already released their third-quarter results mentioned unfavorable exchange rates during their earnings calls.

After:IRS sends letters to millions still eligible for generous COVID-19 tax relief

Economic figures

In the week ahead, investors will receive other key economic updates on Wednesday when the U.S. Census Bureau releases its September housing starts report and on Thursday when the People’s Bank of China announces its latest rate decision. of interest.

Benzinga is a financial information and data company headquartered in Detroit.

Leslie M. Gill