Stocks fell last week, buffeted by concerns about stock price valuations and a possible government shutdown. The Standard & Poor’s 500 Index declined 0.31 percent, while the Nasdaq Composite Index lost 0.65 percent. The Dow Jones Industrial Average slipped 0.15 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, fell 0.34 percent.1,2 Stocks Under PressureThe S&P 500 and the small-cap index Russell 2000 hit all-time intraday highs on Tuesday before trending lower. The decline turned into a three-day retreat for stocks.3 Adding to the selling pressure was Federal Reserve Chair Powell, who made cautious comments on stock price valuations on Tuesday. Investors were also watching a possible government shutdown as Congressional budget deliberations appeared to stall.4,5 It was the first time in six months that all three averages (Dow, S&P 500, and Nasdaq) declined over three consecutive sessions.6 Stocks rebounded Friday after the Personal Consumption & Expenditures (PCE) Index—the Fed's preferred inflation measure—was in line with expectations. The news appeared to reassure investors that the Fed would move ahead with its “penciled-in" rate adjustments for the remainder of this year.7 |
 |
