Daily SPDR Energy Select Sector (XLE)
Energy stocks outperformed, benefiting from rising oil prices due to tensions in the Middle East. The Energy Select Sector SPDR Fund (XLE) is up more than 4% for the week, marking its best week since January. Diamondback Energy and Marathon Oil led the way, rising 6% and 5.5%, respectively. U.S. crude oil futures rose another 1.5% on Thursday, pushing weekly gains to 4.6% as supply concerns grow amid geopolitical unrest.
Labor market data attracts attention ahead of salary statistics
Wall Street’s focus has also shifted to future labor market data, with Thursday’s jobless claims numbers and Friday’s jobs report being crucial. Analysts are looking for signs of weakness in the labor market that could cause the Federal Reserve to continue its rate-cutting cycle. September’s jobs report is likely to set the tone for trading, as a strong labor report could slow the pace of Fed rate cuts, potentially weighing on markets.
Market outlook: Caution required before important data
In the short term, markets are expected to remain volatile, with tech stocks likely to remain under pressure amid rising interest rates and mixed earnings. Energy stocks may continue to find support as oil prices rise, but much will depend on Friday’s jobs report. A weaker-than-expected labor market could trigger more aggressive rate cuts, boosting stock prices in the short term. Conversely, stronger economic data could reinforce the Fed’s cautious approach, putting further downward pressure on stock prices. Traders should prepare for continued volatility, particularly in the tech and energy sectors, as geopolitical risks and economic indicators evolve.
