Month End Flows Push S&P Higher – US Market Wrap

Stocks rose in the final stretch of a wild August, as traders braced for what is traditionally the worst month for equities.

The S&P 500 closed close to all-time highs just a few weeks ago, despite all of the global market turmoil. Equities surged in the final 10 minutes of US trading, with the S&P 500 up 1%. The gauge rose for the fourth consecutive month as data showed the economy is holding up, leaving the door open for the Federal Reserve to begin cutting interest rates in September. Whether a large-scale reduction remains on the table, next week’s jobs report may provide some clues.

The S&P 500 increased to around 5,650. Volume was low ahead of Monday’s US holiday. The Nasdaq 100 gained 1.3%. The small-business Russell 2000 index rose 0.7%. The Wall Street Journal reported that Goldman Sachs Group Inc. intends to lay off over 1,300 employees worldwide. Dell Technologies rallied following strong results.

The VIX, or “fear gauge” on Wall Street, fell to around 15. This comes after an unprecedented spike that pushed the index above 65 during the August 5 market selloff. An options trader or traders purchased call spreads on the VIX expiring in September, spending up to $9 million to protect against a spike in the S&P 500 volatility gauge above 22.

Treasury 10-year yields rose five basis points, to 3.91%. The dollar increased at the end of its worst month this year. Oil sank.