The S&P 500 (SP500) ended Friday’s trading session firmly in the green. However, the late rally did little to help the benchmark index in terms of its weekly performance as it slumped to losses of 3.35%.
The Federal Reserve dominated headlines during the five-day session. On Wednesday, it hiked its key policy rate by 75 basis points for a fourth straight meeting, as widely expected. But it was Fed chair Jerome Powell’s comments at the post-decision conference that proved to be the catalyst for a chunk of the week’s selling.
Powell indicated that the central bank was not done tightening policy yet and that there was still a ways to go. He did signal that policymakers may moderate the pace of increases going forward, but also said that the terminal rate may “ultimately move to higher levels” than earlier expected. Market participants interpreted the message as not dovish enough, with the S&P 500 (SP500) falling a hefty 2.5% on Wednesday after the Fed chief’s comments.
Sentiment was also weighed down by economic data through the week which showed continued strength in the labor market. Job openings unexpectedly rose in September, the October ADP jobs report came in stronger than anticipated, and the number of Americans filing for weekly jobless claims fell. Additionally, Friday’s hotly anticipated October nonfarm payrolls data showed a healthy gain in jobs and an increase in average hourly earnings, though unemployment did tick up.
Earnings news was also in focus during the week, with high-profile companies like Pfizer, Amgen, Eli Lilly, PayPal, Starbucks, Uber and Warner Bros. Discovery reporting their quarterly results.
Next week will be an eventful one, with more earnings, U.S. midterm elections and the CPI print on the radar.
The SPDR S&P 500 Trust ETF (NYSEARCA:SPY) on Friday fell 3.26% for the week alongside the benchmark index. The ETF is -20.76% YTD.
Out of the 11 S&P 500 (SP500) sectors, eight ended the week lower, with heavyweight sectors Communication Services and Information Technology the top losers. Energy was the top gainer as oil prices rose. 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. 28 close to Nov. 4 close:
#1: Energy +2.37%, and the Energy Select Sector SPDR ETF (XLE) +2.43%.
#2: Materials +0.86%, and the Materials Select Sector SPDR ETF (XLB) +0.90%.
#3: Industrials +0.44%, and the Industrial Select Sector SPDR ETF (XLI) +0.48%.
#4: Utilities -0.55%, and the Utilities Select Sector SPDR ETF (XLU) -0.47%.
#5: Financials -0.83%, and the Financial Select Sector SPDR ETF (XLF) -0.82%.
#6: Health Care -1.59%, and the Health Care Select Sector SPDR ETF (XLV) -1.54%.
#7: Real Estate -1.78%, and the Real Estate Select Sector SPDR ETF (XLRE) -1.71%.
#8: Consumer Staples -1.83%, and the Consumer Staples Select Sector SPDR ETF (XLP) -1.80%.
#9: Consumer Discretionary -5.78%, and the Consumer Discretionary Select Sector SPDR ETF (XLY) -5.15%.
#10: Information Technology -6.89%, and the Technology Select Sector SPDR ETF (XLK) -6.63%.
#11: Communication Services -7.44%, and the Communication Services Select Sector SPDR Fund (XLC) -6.75%.
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.