The Strength of the Market is: Strong but Weakening

Last week, the S&P 500 entered a correction, a decline of at least 10% from its record high, which was only 16 days prior. The Nasdaq was dragged further into its correction, and the small-company stocks of the Russell 2000 are nearing a bear market, which is a drop of 20% from its high. Last week, the Dow Jones dropped more than 3%, while the S&P 500 and the Nasdaq slipped more than 2%. Driven by uncertainty, market volatility and on-again-off-again tariff policy, the Dow Jones has been down for two straight weeks and the S&P 500 and the Nasdaq have been down for four consecutive weeks. This week, investors are gearing up for the Federal Reserve's monetary policy meeting (Wednesday afternoon), where they are likely to keep interest rates unchanged, currently at a target rate between 4.25% and 4.50%.

Economic reports from last week came back mixed:

•Small Business Optimism - lower than expectation

•Job Openings - higher than expectation

•Inflation (Consumer) - lower than expectation

•Inflation (Producer) - lower than expectation

•Consumer Sentiment - lower than expectation

•Jobless Claims - lower than expectation

This week, investors will look for guidance from economic reports like Retail Sales, Manufacturing, Housing and Jobless Claims.