In the latest market update, market indices are suggesting anticipation of a rate cut in September, signaling hope for the economy. The stock market saw modest trading activity at the beginning of the week, with investors waiting for key inflation data. Despite this, overall market sentiment remained positive, with major indices showing signs of recovery. The VIX index, for example, dropped to 20 on Monday, a significant decrease from the previous week.
On Tuesday, markets opened cautiously optimistic as the producer price index (PPI) data was released. The PPI showed a 0.1 percent increase in July to 2.2 percent, slightly lower than the expected 2.3 percent. Buoyed by positive data and optimism around the consumer price index report (CPI), markets opened high on Wednesday and continued to rise post-report, showing a seasonally adjusted increase of 0.2 percent compared to June.
The S&P 500 and the Toronto Stock Exchange’s (TSX) S&P/TSX composite index closed higher on Wednesday, although losses in Alphabet, Tesla, and Meta impacted the Nasdaq Composite. With a rate cut expected in September, all major sectors saw gains on Thursday, with tech and resources stocks leading the TSX to its sixth consecutive daily win.
On Friday, the VIX opened at 15.29, its lowest level since July 23. All indices were up on Friday morning, with the Russell 2000 leading in gains as market participants shifted back to small-cap stocks. By the end of the week, all major indices closed higher, with the Nasdaq Composite finishing at 17,631.72, the S&P 500 at 5,554.25, and the Nasdaq 100 at 19,508.52. The Russell 2000 saw the highest increase, rising by 0.30 percent to end the day at 2,141.92.
