US stocks closed higher on Friday, August 30th, with the Dow Jones Industrial Average reaching a second consecutive all-time high. This positive performance was driven by strong consumer spending and moderate inflation, which fueled hopes for a modest Federal Reserve (Fed) rate cut in September. These factors suggest a potential “soft landing” for the US economy, a scenario where inflation cools down without triggering a recession.
Economic data released on Friday supported this optimistic view. U.S. personal income rose by 0.3% in July, reaching $24.015 trillion, while spending increased by 0.5%. The core Personal Consumption Expenditures (PCE) price index, a key inflation measure, rose by 0.2%, matching estimates. The University of Michigan’s August consumer sentiment index was slightly revised to 67.9.
All 11 sectors of the S&P 500 closed higher, with consumer discretionary leading the gains, followed by industrials and information technology. The Dow Jones Industrial Average rose by 0.55% to close at 41,563.08. The S&P 500 ended the day higher by 1.01% at 5,648.40, and the Nasdaq Composite rose 1.13%, finishing the session at 17,713.62.
Asian Markets Mixed
Asian markets were mixed on Tuesday. Japan’s Nikkei 225 closed higher by 0.14% at 38,728.50, led by gains in the Shipbuilding, Financial Services, and Insurance sectors. Australia’s S&P/ASX 200 declined by 0.08%, ending the session at 8,103.20, with losses in the Consumer Staples, Metals & Mining, and Resources sectors. India’s Nifty 50 declined 0.04%, closing at 25,268.90, while the Nifty 500 closed higher by 0.08% at 23,779.00. China’s Shanghai Composite was down 0.29%, ending the session at 2,802.98, while the Shenzhen CSI gained 0.26%, closing at 3,273.43. Hong Kong’s Hang Seng ended the session lower by 0.23% at 17,651.49.
Europe Trades Lower
European markets were trading lower in early trading on Tuesday. The European STOXX 50 index declined 0.48%. Germany’s DAX slid 0.40%. France’s CAC was down 0.28%. U.K.’s FTSE 100 traded lower by 0.57% .
Commodities
Oil prices fell on Tuesday due to concerns over weak economic growth in China. Crude Oil WTI was trading lower by 1.62% at $72.33/bbl, and Brent was down 2.35% at $75.72 bbl. However, some support for oil prices came from the halted Libyan oil production and upcoming OPEC+ output increases. Natural Gas gained 3.39% to $2.199. Gold was trading higher by 0.05% at $2,528.95, Silver fell 1.79% to $28.622, and Copper fell 3.31% to $4.070.
US Futures
US Futures were trading lower in early trading on Tuesday. Dow futures were down 0.51%, S&P 500 futures fell 0.54%, and Nasdaq 100 Futures slid 0.75%.
Forex
The U.S. dollar index rose 0.15% to 101.80, reaching a two-week high as investors await key U.S. economic data that could impact the Federal Reserve’s rate decision. The USD/JPY was down 0.64% to 145.95, and the USD/AUD gained 0.85% to 1.4853. The yen strengthened after the Bank of Japan signaled potential rate hikes.
