The S&P 500 index fell 1.95% last week, weighed down by a slide in the technology sector amid questions over artificial intelligence funding The index ended Friday's session at 7,659.44. The market benchmark is now up 0.1% for the month and 12% this year.
Just four of the S&P 500's 11 sectors fell last week, but their losses were large enough to outweigh the other seven sectors' gains. The technology sector slid 6.4%, followed by a 1.9% drop in consumer discretionary, a 1.6% decline in communication services and a 0.9% slip in industrials. Chipmakers led declines amid concerns that high borrowing costs could slow debt-funded artificial intelligence (AI) investment. Upcoming earnings may reveal whether companies can sustain aggressive spending and justify elevated tech valuations.
On the upside, consumer staples and energy rose 5% each, followed by a 3.4% gain in health care, a 2.5% increase in materials and a 2% rise in utilities. Financials and real estate also edged higher.
The energy sector's advance came as crude oil futures rose. Gainers included shares of ConocoPhillips (COP), up 9.3%, and APA Corp. (APA), up 7.1%.
Economic data showed US industrial production increased more than expected in September as manufacturing output rebounded despite weakness in the auto component. Industrial output grew 0.7% last month, following a revised 0.1% gain for August, according to Federal Reserve data. The consensus estimate was for a smaller 0.4% increase in September in a survey compiled by Bloomberg.
Retail sales rose 0.8% in September, but gas station sales surged 6.4%. Excluding gas stations, sales rose just 0.2%, suggesting higher fuel prices inflated the headline figure. Restaurant sales also rose 1.1%, suggesting some underlying consumer resilience. However, because retail sales are not adjusted for inflation, the report offers limited reassurance about purchasing power heading into the holiday shopping season.
Quarterly reports this week are expected from companies including Meta Platforms (META), Tesla, Procter & Gamble (PG), Union Pacific (UNP), American Express (AXP), GE Aerospace (GE), Netflix (NFLX), 3M (MMM) and General Motors (GM).
Economic data will include September housing starts and pending home sales, as well as the early estimate of October's purchasing managers' indexes.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
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