Stock Market Plunge: Dow Falls Nearly 300 Points Ahead of Federal Reserve Meeting

U.S. stocks faced a sharp decline on Friday. This shedding gains from earlier in the week as investors shifted their focus to the imminent Federal Reserve interest rate announcement.

Dow Jones Dips, S&P 500 and NASDAQ Follow Suit

At 16:01 ET (20:01 GMT), the Dow Jones Industrial Average plummeted by 288 points or 0.8%. Simultaneously, the S&P 500 took a hit of 1.2%, and the NASDAQ Composite dropped by 1.6%.

Arm’s Nasdaq Debut Fuels IPO Expectations

Arm Holdings, the chip designer, witnessed a remarkable 25% surge above its Nasdaq debut price. This took place on Thursday, setting the stage for other companies planning IPOs. This optimism extends to the impending debut of the delivery platform, Instacart, slated for later this month. However, Instacart’s shares retreated by 4.5% on Friday. The favorable performance of Arm’s listing has ignited hope among approximately 150 companies. However, now these companies waiting to go public on the Nasdaq, marking a 40% increase compared to the previous year.

Federal Reserve Meeting Looms on Stock Market Plunge

As the Federal Reserve gears up for its next meeting in just a few days, investors are grappling with mixed economic indicators. The retail sales report suggests a resilient consumer base heading into the holiday shopping season. Moreover, the inflation remains somewhat elevated, partly due to increased fuel prices in August. Additionally, consumer confidence experienced a dip in early September.

Market participants are keenly awaiting the Fed’s policy-setting meeting next week to gain insights into the future policy trajectory. Although futures traders anticipate the Fed maintaining steady interest rates after 11 consecutive increases, Chair Jerome Powell’s press conference remarks will be closely monitored for further guidance on the Fed’s course of action for the remainder of the year.

Consumer Sentiment Drops

Friday’s economic highlight was the preliminary consumer sentiment reading for September from the University of Michigan, which came in at 67.7, below the expected 69.1.

Auto Workers Strike Impacts Major Plants

In an unprecedented move, members of the United Auto Workers initiated strikes at three major assembly plants following unsuccessful negotiations with major automakers, including General Motors, Ford Motor, and Stellantis. These strikes have affected facilities in Michigan, Ohio, and Missouri. Surprisingly, auto stocks remained relatively stable, with Ford experiencing a minor 0.1% drop, while GM saw an increase of 0.8%.

White House Aims for Resolution Federal Reserve

The strikes have complicated the White House’s economic agenda, but President Joe Biden expressed hope that a mutually beneficial agreement could be reached between the union and Detroit’s auto giants. White House economic adviser Gene Sperling and acting Labor Secretary Julie Su will visit Detroit to provide support in reaching a labor contract.

Planet Fitness CEO’s Departure Weighs on Stock

Separately, Planet Fitness saw a significant 15.9% decline in its shares following the unexpected departure of the gym and fitness center operator’s CEO. The company has engaged an executive search firm to find a suitable successor at Stock Market Plunge.

Crude Oil Prices Rally

Oil prices recorded their third consecutive weekly gain, with U.S. crude surpassing $90 per barrel for the first time in 10 months. This upswing followed better-than-expected data from China, a top oil importer, as the market eagerly awaits the Federal Reserve’s decision on inflation.

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Disclaimer: This article serves solely for informational purposes and should not be construe as financial advice. Thus, we strongly advise readers to conduct thorough research and consult with financial professionals before making any investment decisions.