Image Credit: Microsoft Copilot Designer.

Compared to the preceding two weeks, the first trading week of October 2024 saw very little change for the S&P 500 (Index: SPX). The index closed out the week at 5,751.07, just 0.22% higher than it closed out the previous week.

That slight increase had to be disappointing for Wall Street bulls, who might have expected the unexpectedly strong jobs report on Friday, 4 October 2024 to provide more of a boost for stock prices. But it didn't, because that unexpectedly good news changed the expectations for the size of the Federal Reserve's next cut to U.S. interest rates.

The CME Group's FedWatch Tool slashed the probability of a half-point rate cut at the Fed's upcoming 7 November 2024 meeting to nearly zero percent. It now projects over a 97% probability of a quarter point rate cut. Beyond that date, the FedWatch tool anticipates the Fed will continue a series of quarter point rate cuts at six-week intervals well into 2025, reaching at a target range for the Federal Funds Rate of 3.25-3.50% at its 17 September 2025 meeting.

In changing very little from the previous week, the trajectory of the S&P 500 moved closer toward the middle of the latest redzone forecast range on the alternative futures chart.

(Click on image to enlarge)

We'll be rolling the chart forward to look ahead at the fourth quarter of 2024 in the next edition of the S&P 500 chaos series, which has yet another month of the current redzone forecast range to run through. Until next week, here are the headlines that moved the markets during the week that was:

The Atlanta Fed's GDPNow tool's projection of the real GDP growth rate for the current quarter of 2024-Q3 decreased to +2.5% from the previous week's forecast of +3.1% growth.

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