Freedom: strong company reports failed to keep the S&P 500 from falling

Strong results from individual companies and resilient demand for AI chips did not prevent the U.S. market from declining in the first half of October. In investment review No. 356, Freedom analysts highlight among the key developments accelerating inflation, deteriorating consumer sentiment, and the absence of new guidance on the Fed rate. From October 6 to 16, the S&P 500 fell from 7,819 to 7,659 points.

Read more here in the new biweekly financial markets обзор from Freedom analysts.

Inflation came in above expectations

One of the important events of the period was the release of U.S. consumer price data on October 14. The core CPI index for September, which excludes food and energy, rose by 0.33% month over month versus a consensus forecast of 0.2%, according to the Freedom review.

On a year-over-year basis, core inflation was 2.6%, while the headline consumer price index increased by 3.7%. In remarks on October 16, Fed Chair Kevin Warsh did not provide guidance on further interest-rate adjustments and emphasized the priority of price stability.

Consumer sentiment deteriorated

The preliminary University of Michigan consumer sentiment index published on October 9 fell to 46.3 points. The market expected 47.6 points. The assessment of current conditions hit a record low. The review links this to high prices and expensive debt. The indicator reflects consumers’ perception of their financial situation and the state of the economy.

Johnson & Johnson and TSMC reported better than forecasts

On the corporate side, analysts highlighted the results of Johnson & Johnson (JNJ), published on October 13. The company beat expectations for Q3 thanks to growth in sales of new drugs. Its U.S. revenue rose by 9.1%, while revenue outside the country increased by 1.5%.

Another notable event was the report from Taiwan Semiconductor Manufacturing Company (TSM), released on October 15. Supported by strong demand for AI chips, the semiconductor maker’s results came in above the consensus. The company’s revenue guidance also exceeded the market’s average expectations.

How the S&P 500 moved

At the start of the period under review, on October 6, the S&P 500 stood at 7,819 points. After falling to 7,765 points on October 8, the index rebounded to 7,812 points on October 9. The movement then turned negative again: on October 13 the gauge was at 7,805 points, and on October 14 at 7,719 points. After a partial recovery to 7,744 points on October 15, the index finished October 16 at 7,659 points.

In the Freedom review, this period is presented as a combination of strong corporate news and less favorable macroeconomic signals: company results beat forecasts, while inflation came in above expectations and consumer sentiment deteriorated.

This is not an individual investment recommendation.