Vietnam stock market faces October uncertainty amid US Fed rate outlook

The Vietnamese stock market enters October with a cautious outlook following a period of adjustment. The VN-Index recently fell to 1,737.71 points, accompanied by a decline in liquidity to below 12,000 billion VND per day. Analysts suggest the market faces pressure from exchange rates, foreign capital outflows, and interest rates, as a strong US dollar has led to significant net selling by foreign investors.

Despite these pressures, several factors may provide support for the VN-Index, including low valuation levels—with a P/E ratio approximately 26% lower than the long-term average—expected third-quarter business results, and expectations regarding market upgrades under FTSE standards.

In the United States, economic data suggests the Federal Reserve may pause interest rate hikes in October. Recent reports from the US Department of Labor showed only 29,000 jobs were added in September, significantly lower than the forecasted 90,000. This weakening labor market, combined with lower-than-expected inflation, has led experts to believe the Fed will adopt a cautious approach, potentially holding rates steady to monitor further economic and inflation data.