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Market Recap
WEEK OF OCT. 2 THROUGH OCT. 6, 2023
The S&P 500 index edged up 0.5% last week, starting the new month and quarter on a slightly more positive note following four consecutive weeks of losses. The market benchmark ended Friday's session at 4,308.50, up from last Friday's closing level of 4,288.05. This marks its first weekly increase since the last week of August. The index is still in positive territory for 2023, with a 12% year-to-date rise.
The slight weekly gain comes just after the S&P 500 closed out its toughest quarter of the year. The index fell 3.6% in Q3, marking its first quarterly loss since Q3 of 2022, amid rate policy concerns. The S&P 500 had climbed in the first half of 2023 on optimism for the Federal Open Market Committee to stop raising rates, but investors are now bracing for another potential increase.
September nonfarm payrolls released Friday showed last month's US nonfarm payrolls jumped more than expected despite higher interest rates and elevated inflation. Investors believe the stronger-than-expected payrolls could prompt the FOMC to raise rates again to continue fighting inflation.
However, wage growth came in lighter than expected. Also, the September unemployment rate remained at 3.8%, slightly higher than the 3.7% rate expected, as the labor forcegrew only modestly. Both data points could lessen the case for the FOMC to raise rates in November.
Amid the mixed signals, investors will be looking closely at September inflation data due this week for more signs of the FOMC's next potential move.
Communication services led the gainers last week, climbing 3.1%, followed by a 2.9% rise in technology. The health care sector also rose, climbing 0.9%.
All other sectors fell, led by a 5.4% slide in energy, a 3.1% decline in consumer staplesand a 2.9% slip in utilities.
In communication services, shares of Alphabet (GOOG, GOOGL) rose slightly more than 5% on the week as the Google parent company unveiled its latest series of Pixel smartphones and smartwatches and introduced the Chromebook Plus laptop series that features built-in Google applications and artificial intelligence capabilities.
The technology sector's strongest gainers included chip makers Advanced Micro Devices (AMD) and NVIDIA (NVDA). AMD rose 4.3%, while NVIDIA's shares climbed 5.2%. NVIDIA's stock climb came after KeyBanc boosted its price target on the stock to $750 per share from $670.
On the downside, the energy sector's drop came as crude oil futures fell on the week. Decliners included Valero Energy (VLO), down almost 11%, and Devon Energy (DVN), down 8.4%.
This week, investors will have a close eye on September inflation data, with the monthly producer price index expected on Wednesday and the monthly consumer price index due Thursday. Investors are also likely to pay close attention to minutes being released Wednesday from the FOMC's September meeting, as well as comments from Dallas Fed President Lorie Logan and Fed Gov. Philip Jefferson, who are both scheduled to speak today.
