Stocks ended lower
US stocks ended lower last week amid political uncertainty. Strong industrial production data didn’t boost the markets. Now, the primary focus is the Fed’s meeting this week. Apart from the expected rate hike, investors will also be watching for cues about the Fed’s rate forecast this year. Any hike in interest rates this week could boost financials in the near term.
The NASDAQ Composite Index (QQQ) fell 1.0% and closed the week at 7,481.99, while the S&P 500 Index (SPY) fell 1.2% to 2,752.01. The Dow Jones industrial average (DIA) lost 1.5% and fell to 24,946.51.
Slump in the financial index
Financials also struggled last week even though the ten-year bond yield rose marginally to 2.8%. The S&P 500 financial index contracted 2.40% and closed the week at 480.3. US banks stocks were some of the biggest laggards in the market. Wells Fargo (WFC) dropped 4.0% after a report in The Wall Street Journal revealed that the government has expanded its probe to include Wells Fargo’s wealth management business. US Bancorp (USB), Citigroup (C), and JPMorgan Chase (JPM) also dipped more than 2%. The Financial Select Sector SPDR ETF (XLF) and the Vanguard Financials ETF (VFH) lost 2.8% and 2.5%, respectively.