S&P 500 posts ~4% weekly gain even as big tech disappoints; Fed meeting in focus

The S&P 500 (SP500) on Friday added 3.95% for the week to end at 3,901.06 points, its highest closing level since mid-Sept. The benchmark index has now posted a two-week win streak.

The rally has come in an earnings heavy week dominated by quarterly figures from megacap technology stocks. Sentiment has also been buoyed by hopes that the Federal Reserve may slow down its aggressive rate-hike campaign, with focus now on the central bank’s policy meeting starting next Wednesday. It is widely expected to raise interest rates by 75 basis points, and policymakers’ comments will be closely watched for clues to the Fed’s path ahead.

FAANG companies Meta Platforms, Alphabet, Amazon and Apple reported a mixed set of results during the week. The Google parent posted a decline in ad revenue, while the e-commerce giant issued a gloomy holiday sales forecast, which led to its stock losing its trillion dollar market cap status. Investors were particularly displeased with Facebook owner Meta. The social media giant’s shares cratered over 25% on Wednesday after a grim quarterly report and outlook.

Apple was the standout performer, with its shares gaining after better-than-expected results and lifting all three major Wall Street indices on Friday.

Microsoft and Intel were among the other technology giants that reported results. Several other high profile companies announced numbers, including industrial bellwether Caterpillar, fast-food giant McDonald’s, drugmaker Merck, aerospace parts maker Honeywell and planemaker Boeing.

Economic news also contributed to the S&P 500’s (SP500) weekly gain. A contraction in U.S. business activity for a fourth straight month and a higher than expected drop in home prices suggested that there was some progress being made in the Federal Reserve’s efforts to cool the economy. Investor sentiment was also aided by GDP data that showed the U.S. economy rebounded in Q3.

Additionally, market participants parsed a greater than expected fall in the Conference Board consumer confidence index, a narrower-than-expected fall in new homes sales, a fall in personal consumption expenditures, lower-than-expected jobless claims, durable goods orders, a rise in core PCE price index, a slide in pending home sales and Q3 employment cost index.

The SPDR S&P 500 Trust ETF (NYSEARCA:SPY) on Friday gained 3.91% for the week alongside the benchmark index. The ETF is -18.12% YTD.

Except for Communication Services, all 11 S&P 500 (SP500) sectors ended the week higher, led by Industrials and Utilities. See below a breakdown of the weekly performance of the sectors as well as the performance of their accompanying SPDR Select Sector ETFs from Oct. 21 close to Oct. 28 close:

#1: Industrials +6.73%, and the Industrial Select Sector SPDR ETF (XLI) +6.69%.

#2: Utilities +6.48%, and the Utilities Select Sector SPDR ETF (XLU) +6.48%.

#3: Financials +6.19%, and the Financial Select Sector SPDR ETF (XLF) +6.21%.

#4: Real Estate +6.17%, and the Real Estate Select Sector SPDR ETF (XLRE) +6.20%.

#5: Consumer Staples +6.09%, and the Consumer Staples Select Sector SPDR ETF (XLP) +6.18%.

#6: Health Care +5.00%, and the Health Care Select Sector SPDR ETF (XLV) +4.99%.

#7: Information Technology +4.28%, and the Technology Select Sector SPDR ETF (XLK) +4.21%.

#8: Materials +3.34%, and the Materials Select Sector SPDR ETF (XLB) +3.36%.

#9: Energy +2.75%, and the Energy Select Sector SPDR ETF (XLE) +2.67%.

#10: Consumer Discretionary +0.71%, and the Consumer Discretionary Select Sector SPDR ETF (XLY) +1.78%.

#11: Communication Services -2.85%, and the Communication Services Select Sector SPDR Fund (XLC) -2.23%.

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.

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