The Santiago Stock Exchange rose on Friday and its main index, the MSCI IPSA, climbed back above 11 thousand points, according to Diario Financiero. The index was up 0.4% at 11,012.73 points, at the end of a volatile week.
The IPSA comprises the most actively traded stocks in the Chilean market. It works as a thermometer: when it rises, large local companies are worth more on average. With this gain, the index was heading for a slight weekly increase, according to the same outlet.
Falabella led the gains with a rise of 2.1%. Its weight matters because it is a heavily weighted stock, meaning it moves the index more than others. It was followed by CCU (2.1%), Engie (1.8%) and Andina-B (1.7%).
On Wall Street, the main stock trading center in the United States, the picture was different. The Nasdaq, an index heavily weighted toward technology companies, was down 1.1%, dragging the S&P 500 down 0.4%. The Dow Jones, by contrast, was up 0.2%.
European stock markets rose, while South Korea and Japan recovered only a portion of their losses for the week. According to Diario Financiero, those losses reflect the unwinding of positions betting on the development of artificial intelligence (AI).
The market's focus was on the Federal Reserve (Fed), the central bank of the United States. Its interest rate decisions influence the cost of money around the world, including Chile, which is why local investors follow them closely.
Its chair, Kevin Warsh, avoided giving any clues about monetary policy on Friday in Bangkok, Thailand. He took part in a discussion during the annual meetings of the International Monetary Fund (IMF).
Traders interpreted that silence as support for their baseline scenario: a pause in rate increases at the meeting the week after next. They currently assign only a 15% probability to another adjustment at that meeting, although they consider one certain in December.
For you, as an investor or pension contributor, the logic is simple. Higher interest rates in the United States tend to attract capital to that country and make stocks in markets such as Chile less attractive. A pause, however brief, offers some breathing room.
Warsh's comments followed upside surprises in US consumer and producer prices, which unsettled investors. Those figures explain why the market still expects another increase before the end of the year.
Meanwhile, US Treasury bond yields were reversing some of Thursday's sharp declines, which were concentrated in longer maturities. According to Diario Financiero, those declines reflected concerns about financing AI projects, which pushed investors toward bonds considered safer.
The next key signal will come from the Fed meeting the week after next, where the market is pricing in a pause, followed by the meeting in December, for which it considers a rate increase certain.
