The S&P 500 (SP500) on Friday shed 2.67% for the holiday-shortened week to settle at 3,970.04 points, posting losses in three out of four sessions. Its accompanying SPDR S&P 500 Trust ETF (NYSEARCA:SPY) also fell 2.67%.
This was the benchmark index’s worst weekly performance since early December 2022. It was also the third straight week of losses for the gauge.
The spotlight this week was dominated by economic data and concerns regarding the Federal Reserve’s path forward on rate hikes. Following a holiday due to President’s Day, U.S. stocks slumped on Tuesday after disappointing forecasts from retail giants Walmart (WMT) and Home Depot (HD) dented sentiment.
Wednesday saw the release of the Fed’s minutes of its February monetary policy committee meeting. The minutes showed that some Fed policymakers favored raising the key rate by 50 basis points at the last meeting as the central bank fights to bring inflation under control.
On Thursday, the S&P 500 (SP500) managed to avoid posting a five-day losing streak due to a late-session rally. However, the index fell again on Friday after yet more data showed a hotter-than-expected rise in inflation – this time in the form of the personal consumption expenditure price index for January which rose more than expected. The same report also showed a surge in consumer spending. This data came on the back of stronger-than-anticipated consumer price index and producer price index reports last week.
The numbers have led to worries that the Fed would have to stick to its aggressive tightening stance for longer than thought before so as to bring down inflation.
The weekly economic calendar also saw a revised estimate for Q4 GDP growth and an unexpected dip in weekly jobless claims.
Moving on to earnings, the week saw reports from chip giant NVIDIA (NVDA), medical device maker Medtronic (MDT), Chinese tech giants Baidu (BIDU) and Alibaba (BABA), dating app Bumble (BMBL) and electric vehicle manufacturer Nikola (NKLA).
Next week will see reports from other retailers such as Target (TGT) and Macy’s (M), which should shed more light on the state of consumer spending during the all important holiday sales quarter. Dow 30 component Salesforce (CRM) is also on tap.
Turning to the weekly performance of the S&P 500 (SP500) sectors, all 11 of them – with the exception of Energy – ended in the red. Consumer Discretionary and Communication Services both fell more than 4%. See below a breakdown of the weekly performance of the sectors as well as their accompanying SPDR Select Sector ETFs from Feb. 17 close to Feb. 24 close:
#1: Energy +0.17%, and the Energy Select Sector SPDR ETF (XLE) +0.20%.
#2: Materials -0.13%, and the Materials Select Sector SPDR ETF (XLB) -0.14%.
#3: Consumer Staples -1.40%, and the Consumer Staples Select Sector SPDR ETF (XLP) -1.32%.
#4: Financials -1.97%, and the Financial Select Sector SPDR ETF (XLF) -2.01%.
#5: Health Care -2.67%, and the Health Care Select Sector SPDR ETF (XLV) -2.64%.
#6: Information Technology -2.71%, and the Technology Select Sector SPDR ETF (XLK) -2.67%.
#7: Industrials -2.73%, and the Industrial Select Sector SPDR ETF (XLI) -2.64%.
#8: Utilities -2.79%, and the Utilities Select Sector SPDR ETF (XLU) -2.73%.
#9: Real Estate -3.78%, and the Real Estate Select Sector SPDR ETF (XLRE) -3.74%.
#10: Communication Services -4.37%, and the Communication Services Select Sector SPDR Fund (XLC) -3.81%.
#11: Consumer Discretionary -4.44%, and the Consumer Discretionary Select Sector SPDR ETF (XLY) -4.46%.
Below is a chart of the 11 sectors’ YTD performance and how they fared against the S&P 500. For investors looking into the future of what’s happening, take a look at the Seeking Alpha Catalyst Watch to see next week’s breakdown of actionable events that stand out.