U.S. market indexes ended the week lower as companies and investors digested the Fed’s decision Thursday to keep the federal funds rate unchanged at 0% to 0.25%. The S&P 500 was down 0.15% for the week, led lower by the materials and financial sectors. The Dow Jones Industrial Average was down 0.31% for the week with losses led by Cisco (CSCO, Financial) and gains led by UnitedHealth Group (UNH, Financial). For September, the Dow Jones Industrial Average is now down 0.87% while the S&P 500 is down 0.71%.
Perhaps one of the most surprising things from the Fed’s September policy statement, which reflects the overall sentiment of the two-day meeting, was the heightened focus on affects from the global economy. Changes to the Fed’s September policy statement included two added references to the global watch, while previously the Fed had only alluded to international factors once in its statement, primarily as a peripheral consideration.
In the September statement, the following two new sentences indicate the Fed’s heightened global watch:
Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term.
The Committee continues to see the risks to the outlook for economic activity and the labor market as nearly balanced but is monitoring developments abroad.
In an interview Thursday following the Federal Open Market Committee’s two-day meeting, Bob Doll of Nuveen Asset Management and Anika Khan of Wells Fargo Securities discussed the heightened focus from the Federal Reserve on global market factors.
