The materials sector of the S&P 500 has experienced a significant rebound, bringing it back into positive territory for the year to date. This resurgence can be attributed to the easing of rate fears following weak labor-market data.
Investor Sentiment and Rate Expectations
September witnessed a downward trend in the stock market, largely driven by investor realization that the Federal Reserve is unlikely to lower interest rates in the near future. Oliver Pursche, senior vice president at financial advisory Wealthspire, explains, "The downside of September was primarily driven by investors recognizing that the Fed is not going to lower interest rates any time soon. But also, at the same time, recognizing that the ever-approaching recession that everyone's been talking about being right around the corner for the last two years is still nowhere near."
Strength of the U.S. Dollar
Aside from a brief spike last year, the U.S. dollar currently stands at its highest level against a basket of rivals in decades. This strong dollar has had a notable impact on gold futures, which have experienced an eighth consecutive session of declines. Given their sensitivity to dollar fluctuations, this downward trend can be expected to continue.
Lithium Americas Completes Split into Two Companies
Lithium mining start-up, Lithium Americas, has successfully completed a split into two separate entities. As a result, Lithium Americas Argentina has been spun off to shareholders.