2023-06-16 18:05:00 ET
The S&P 500 ( SP500 ) on Friday added 2.58% for the week to close at 4,409.74 points, posting gains in four out of five sessions. Its accompanying SPDR S&P 500 Trust ETF ( NYSEARCA: SPY ) rose 2.23% for the week.
The benchmark index hit a few notable milestones during the week. On Thursday, the gauge closed at its highest level since April last year. It also posted six straight days of gains, its best such run since November 2021. Moreover, the index is now on a five-week win streak.
The big news was undoubtedly the Federal Reserve's first rate hike skip after ten consecutive increases. The central bank also released its updated dot plot, which was significantly more hawkish than expected. The Fed projected an increase in gross domestic product growth, core PCE inflation and a higher peak rate, implying that there were two more rate hikes on the cards this year.
Fed chair Jerome Powell in his post-decision press conference played down those expectations, saying that policymakers had found it "prudent" to hold rates steady. He added that there had been no rate decisions taken for the July meeting yet, and that it would be a live meeting.
Market participants have shrugged off the signal of two more hikes and have instead focused on economic data, which has continued to show an easing in inflation and signs of cooling in the economy, leading them to bolster their bets that the Fed would have to end its aggressive tightening-cycle sooner rather than later.
Two important inflation measures this week have supported market expectations. The consumer price index (CPI) report for May showed a Y/Y deceleration in both the headline number and the core CPI figure. Additionally, the producer price index (PPI) report for May came in, with the headline number falling more than expected on a M/M basis and trailing the consensus on a Y/Y basis. Finally, the number of Americans filing for weekly jobless claims came in higher than anticipated, suggesting that cracks had begun to appear in what has been a highly resilient labor market.
Technology stocks were back in focus this week, as the hype around artificial intelligence continued to drive positive sentiment in the sector. Mega-cap names garnered the spotlight: NVIDIA ( NVDA ) solidified its position in the $1T market-cap club, while Microsoft ( MSFT ) notched a new closing high. The tech-heavy Nasdaq Composite ( COMP.IND ) posted weekly gains of 3.25% and is up a whopping ~30% YTD.
Though earnings season is yet to heat up, there were a few high profile names that reported their results this week. Cloud services giant Oracle ( ORCL ) and design software maker Adobe ( ADBE ) reported strong figures, while Kroger's ( KR ) report was met with disappointment. The week ahead will see announcements from companies such as parcel delivery firm FedEx ( FDX ) and professional IT services provider Accenture ( ACN ).
Turning to the weekly performance of the 11 S&P 500 ( SP500 ) sectors, Technology was king with gains of over 4%. Materials and Consumer Discretionary also performed strongly, adding over 3% each. Energy was the only loser. See below a breakdown of the weekly performance of the sectors as well as their accompanying SPDR Select Sector ETFs from June 9 close to June 16 close:
#1: Information Technology +4.44 , and the Technology Select Sector SPDR ETF ( XLK ) +4.33% .
#2: Materials +3.32% , and the Materials Select Sector SPDR ETF ( XLB ) +3.48% .
#3: Consumer Discretionary +3.15% , and the Consumer Discretionary Select Sector SPDR ETF ( XLY ) +3.21% .
#4: Industrials +2.95% , and the Industrial Select Sector SPDR ETF ( XLI ) +2.98% .
#5: Communication Services +2.13% , and the Communication Services Select Sector SPDR Fund ( XLC ) +2.45% .
#6: Consumer Staples +1.97% , and the Consumer Staples Select Sector SPDR ETF ( XLP ) +2.13% .
#7: Health Care +1.40% , and the Health Care Select Sector SPDR ETF ( XLV ) +1.37% .
#8: Utilities +1.29% , and the Utilities Select Sector SPDR ETF ( XLU ) +1.37% .
#9: Real Estate +1.19% , and the Real Estate Select Sector SPDR ETF ( XLRE ) +1.54% .
#10: Financials +1.19% , and the Financial Select Sector SPDR ETF ( XLF ) +1.30% .
#11: Energy -0.71% , and the Energy Select Sector SPDR ETF ( XLE ) -0.58% .
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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Wall Street rally picks up steam as S&P 500 notches five-week win streak