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US stocks fell in volatile trading Friday, with the Dow losing more than 500 points, the S&P 500 and Nasdaq lost 1.5% each, as investors digested a slew of economic releases. The Fed's preferred inflation measure, the US core PCE price index, came well above expectations in August, worrying investors that inflation may be stickier than anticipated. On top of that, a report from the US Commerce Department showed that personal spending rebounded in August, pointing to a still resilient economy. Markets rallied early in the session as Fed Vice Chair Lael Brainard acknowledged the need to monitor the impact rising borrowing costs could have on global market stability. All three benchmarks are now on track for sharp weekly and monthly declines, with the Nasdaq losing the most in September, nearly 12%. All indices are headed for three straight quarters of decline for the S&P for the first time since 2009 and for the Nasdaq since the dot-com bubble.

European equity markets rose more than 1% on the last trading day of the month, as investors took advantage of recent losses and piled into retailers, oil and gas and bank stocks. Meanwhile, in the US, the second-in-command at the central bank reassured investors that the Federal Reserve was monitoring the tumultuous in global markets stemming from monetary policy tightening. Considering Q3, stocks in the Old Continent were down for the third consecutive quarter, the longest losing streak since early 2011, on the back of stubbornly high inflation, surging borrowing costs and mounting risks of a global recession, as well as concerns about the outlook for Europe's energy supply. The latest data showed inflation in the region hit 10% in September, above expectations of 9.7%, strengthening expectations for a hefty interest rate increase from the ECB. The Stoxx 600 lost 4.8% during the July-September period and Germany's DAX dropped 6.1%.

Equities in London regained ground on Friday, with the benchmark FTSE 100 rebounding from its lowest closing level in over a year to close above 6,900, driven by gains among real estate, financials, and consumer discretionary stocks. Investors also digested a slew of economic releases, including better-than-expected final readings for second-quarter GDP growth and current account deficit. Still, the index is on track for its second consecutive monthly loss and has lost almost 4% this quarter amid lingering worries about the pace of interest rate increases to tame inflation, an ongoing energy crisis, and, more recently, the impact of the UK’s dubious fiscal policy on global economic growth.

The CAC 40 Index gained 1.5% to 5,733 on the last trading day of the month, rebounding from near 20-month lows in the previous session, in line with its European peers. Considering Q3, France's index lost over 3%, the second consecutive quarter of losses and down almost 6% only in September. Investors continue to worry about the impact of inflation and higher interest rates on growth, as well as the energy crisis. On the data front, preliminary estimates showed France's annual inflation unexpectedly eased for the second month to 5.6% in September of 2022 from 5.9% in the previous month.

The IBEX 35 stock index closed 0.9% higher at 7,350 on Friday, halting a streak of eight consecutive sessions but plunging over 9% in the three months leading to the end of September, marking the worst quarter since the start of the pandemic. Investors continued to monitor risks to the global economy and the ongoing energy crisis in Europe, digesting a slew of concerning economic data ahead of further rate hikes by the European Central Bank. On the corporate front, banks closed deep in the green while utility distributors saw sharp losses.

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