Market Analysis by Antonio Di Giacomo, Financial Markets Analyst for LATAM at XS.com
“The latest trading week in the United States is set to close on a sour note for the S&P 500 and Nasdaq, which are experiencing their longest losing streak since late July. After a session marked by mixed data on inflation and consumer spending, markets leaned toward declines as investors weighed the impact of new tariffs and the Federal Reserve’s monetary policy direction.
On the cost-of-living front, the numbers were not dramatic, but neither were they reassuring. Headline inflation rose slightly, suggesting a moderate pace, although underlying pressure, as measured by core inflation excluding food and energy, remains uncomfortably high. The recently imposed and announced tariffs by the Trump administration add more noise: markets fear they could be passed on to final prices, complicating the central bank’s battle to keep inflation under control.
The Federal Reserve finds itself in a dilemma. Some committee members favor more aggressive interest rate cuts to stimulate the economy, while others warn that acting too soon could fuel a new wave of inflation. This internal division adds to the uncertainty, as every macroeconomic data point and every statement from Fed leadership is scrutinized closely by traders.
In contrast to losses in equity benchmarks, the Dow Jones managed a rebound, driven by industrial and financial giants, with Boeing leading the gains. At the same time, Goldman Sachs and JPMorgan provided additional support. For the S&P 500, the financial sector offered some backing, helping offset the market’s broader downward pressure.
On the corporate side, several companies stood out. Paccar rose after the tariff announcement, with investors betting that vehicle protectionism would favor its domestic production. GlobalFoundries gained optimism amid expectations of support for the semiconductor industry, especially during the current tech boom. On the other hand, Costco’s stock price declined after the company reported quarterly results that fell short of market expectations.
Adding to this is a major geopolitical factor: fears of a potential federal government shutdown could disrupt the release of key data, delay stimulus measures, or trigger further market turbulence. In an environment where transparency of information is crucial for investors, that looming threat only heightens tensions.
Overall, the mood can best be described as “wait and see.” Investors looking for clear signals will need to stay alert to upcoming reports (employment, consumption, production), the behavior of the yield curve, and speeches from the Fed committee. Short-term decisions could hinge on events not yet on the radar of mainstream outlets.
In conclusion, the trading week ends in a turbulent manner, with clear signs of fatigue in major U.S. indexes. Although inflation has not spiraled out of control, ongoing tariff concerns and the Federal Reserve’s strategy keep markets on edge. In this setting, winners and losers are chosen cautiously, and the path ahead will be shaped by how investors interpret each macroeconomic indicator and institutional move.”