Equities Rally on AI Optimism and Fed Easing Expectations

Investor optimism over AI companies and expectations of interest rate cuts helped propel stocks last week. The S&P 500, the Dow and the NASDAQ reached record highs despite the government shutdown, which caused delays in the release of key economic data. In addition to surging AI stocks, major tech and chip stocks also drove the market. Information technology and health care led the market sectors, while energy showed weakness due to slumping crude oil prices. Ten-year Treasury yields eased slightly during the week, partially due to uncertainty over the employment sector. Expectations of a production increase by OPEC+ dragged bearish crude oil prices lower.

Job Openings Unchanged in August

The number of job openings was unchanged at 7.2 million in August. The number of job openings for July was revised up by 27,000 to 7.2 million. Both hires and total separations in August remained relatively unchanged at 5.1 million. Within separations, both quits (3.1 million) and layoffs and discharges (1.7 million) were little changed.

Eye on the Week Ahead

There isn’t a great deal of economic data this week. However, investors likely will be looking ahead to next week when the latest Consumer Price Index is released.