John Hancock: Weekly Market Recap Week Ended September 25th
Down from the peak
With the latest weekly decline, the S&P 500 was down 8% from its early September record high, the NASDAQ was down almost 10% from its peak, and the Dow was 7% below a recent high. The Dow’s record was set in February of this year, when it was 8% above Friday’s closing level.
U.S. Federal Reserve Chair Jerome Powell told Congress that the U.S. economy has a long way to go before it can fully recover from the coronavirus pandemic, and he said it needs further support. He noted that employment and overall economic activity remain well below pre-pandemic levels and said that the path ahead “continues to be highly uncertain.”
It’s been a rough ride lately for U.S. small-cap stocks. The Russell 2000 Index, a small-cap benchmark, outperformed its large-cap peers by a wide margin the previous week, only to lag in the latest week with a decline of 4%. The index sustained two daily declines of around 3% on Monday and Wednesday.
A monthly labor market update due out on Friday is likely to be the week’s most closely watched economic report, and it will be the final jobs report before the U.S. election. The new release will show whether September’s recovery of nearly 1.4 million new jobs extended into October.