Wall Street Ends Mixed

Despite the successful listing of SoftBank-owned chip designer ARM, both the S&P 500 and the Nasdaq canceled out their weekly gains, falling by 0.16% and 0.39% for the week respectively. Nonetheless, blue-chip DJIA stayed positive (+0.12%). Mixed economic data curtailed investors' risk enthusiasm as Treasury yields surged again with a 10-year yield touching 4.33%. Thursday's retail sales data showed a resilient consumer heading into the holiday shopping season. However, inflation continues to be high, particularly in light of increased fuel prices. University of Michigan consumer inflation expectations are subsiding amid reduced consumer confidence. It dropped to 67.7 in early September from 69.5 a month earlier.

All these factors solidify predictions that the Federal Reserve will keep its central interest rate on hold at next week's monetary policy review meeting, stoking expectations that the tightening phase might be over.

In Europe, recurrent inflation caused ECB to hike its deposit rate by 0.25 points to an all-time high of 4%. This marks ten consecutive hikes with analysts predicting rates have now peaked but will sustain current levels for many months ahead. The MSCI EMU gained 1.24%, while the FTSE jumped by 3.12%. 

In Asia, Chinese industrial production and retail sales data showed better than anticipated growth in August, signifying the early impacts of prior stimulus measures. However, fixed asset investment decreased, with new home sales seeing the biggest drop in almost a year during August. The People's Bank of China also announced that it will reduce the reserve requirement ratio for all banks by 25 basis points - its second such move this year - unless they have already implemented a 5% reserve ratio. The Shanghai Composite was flat week-on-week (+0.03%). On the other hand, Japan's Nikkei 225 surged by 2.84% after ARM's parent company, SoftBank Group Corp., rose by 5.54%, taking the index to its highest point in two and half months and within striking distance of a record peak set 33 years ago.

Utilities shine again   

The S&P utilities sector, despite experiencing a disappointing year-to-date return of -8.69% and being at the lower end of the S&P 500 index range, appears to be showing signs of recovery. After enduring a challenging period, it has staged a turnaround by registering a weekly gain of 2.67%, thus becoming the top performer of the week within the benchmark index. The consumer discretionary sector fared well, primarily driven by Tesla stocks (TSLA) which soared 10.42% after Morgan Stanley upgraded the electric vehicle manufacturer's rating from "equal-weight" to "overweight", predicting that its Dojo supercomputer could increase the company's market value by almost $600 billion. Financials completed the podium this week (up 1.44%). 

The energy sector treaded water (+0.12%) even as crude oil prices continued their upward trajectory (WTI increased by 3.73% to over $90 a barrel). This positive trend is largely due to Saudi Arabia and Russia's agreement to extend their voluntary supply cuts until the end of the year and better-than-expected data from top importer China. The news emerged on Friday that California is suing major oil corporations including Exxon Mobil Corp (XOM), Shell PLC (SHEL), and Chevron Corp (CVX), alleging they have downplayed the risks associated with fossil fuels. Meanwhile, Energy Secretary Jennifer Granholm informed House lawmakers that the US Department of Energy plans to replenish the Strategic Petroleum Reserve when oil prices become more favorable.

On the flip side, tech stocks plunged for the second straight week (-2.24%) in the wake of Nvidia (NVDA), down 3.37%, and Oracle (ORCL), down 9.82% as the company provided disappointing current-quarter revenue guidance.

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