Happy Friday! Inflation and jobless claims continue to rise, putting the Fed in a very tricky spot. As investors await the next move, see what the central bank’s balancing act means for your portfolio.

Also, investors who once thrived on outsmarting the market are now facing unprecedented challenges as traditional strategies lose their edge. What’s really behind this shift — and could it signal the dawn of a new investing era?

Plus, Benzinga is hosting the biggest Fintech conference of the year. Click here for more details, and come join the biggest names in Fintech.

In Today's Edition

• MARKET RECAP

• MARKET HEATMAP

• FIVE ZINGERS

• MARKET HISTORY

• ONE FOR THE ROAD

Inflation And Unemployment Are Soaring — And The Fed Is Now Trapped

The Federal Reserve faces an exceptionally delicate balancing act, as its dual mandate — price stability and maximum employment — is being pulled in opposite directions.

Thursday’s CPI readings were higher than expected and marked the highest since January, while the labor market is flashing warning signs as jobless claims jumped to the highest since 2021.

A 25 basis-point rate cut is widely expected next week, but what happens after that? Read on for more insights and where the Fed is headed next.

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Yesterday: U.S. indexes soared to record highs on Thursday, with the Dow surging over 600 points to finish above 46,000 for the first time. The S&P 500 and Nasdaq also notched record highs as Wall Street cheers on future rate cuts. August’s Consumer Price Index rose 0.4% month-over-month, slightly above expectations, though the annual increase of 2.9% aligned with forecasts. Markets largely shrugged off the inflation data, focusing instead on a sharp rise in weekly jobless claims, which jumped to 263,000 — the highest since October 2021 — suggesting potential cooling in the labor market. The U.S. dollar weakened, and oil prices fell after projections of higher OPEC+ output later this year.

On Our Radar: Analysts will be watching the consumer sentiment report, the University of Michigan inflation survey, as well as the Baker Hughes oil rig count. On the earnings front, all eyes will be on The Hain Celestial Group (HAIN), which will report results before the market opens on Monday.

Shares of Synopsys (SNPS), Micron (MU) and Lam Research (LRCX) were flying high, while Delta (DAL) and Oracle (ORCL) tumbled. Here’s a look at some of the biggest winners and losers on Thursday.

Discover how the market is moving with our interactive heatmap. Filter by market cap, or click on any box to explore specific sectors or assets in more detail.

Learn How You Can Capitalize On Interest Rate Moves With Leveraged And Inverse ETFs

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On This Day In 2019…

SmileDirectClub went public, raising approximately $1.3 billion in one of the largest health tech IPOs of the year. Priced at $23 per share, the IPO gave the direct-to-consumer dental aligner startup a valuation of nearly $9 billion. However, investor enthusiasm quickly faded as shares dropped more than 25% on the first day of trading. That plunge continued as mounting criticism over its business model, regulatory challenges and growing competition contributed to its financial struggles. The company filed for Chapter 11 bankruptcy in December 2023.

QUOTE OF THE DAY

“Inflation is taxation without representation.“

 — Milton Friedman

Why Active Investors Are Losing The Game In Today's Stock Market

Active investors prided themselves on beating the market, identifying hidden gems, timing trends and delivering that elusive alpha. But in today’s market, that chase is harder to come by.

As the dream of beating the S&P 500 drifts further out of reach, even seasoned investors are finding themselves outpaced by a market increasingly dominated by mega-cap stocks and older IPOs that are past their growth phase. All of it is putting traditional investing playbooks to the test.

Is this the end of alpha, or just a transition before a new era of opportunity?

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