The Standard & Poor's 500 index slipped 0.5% last week, led by a slide in communication services amid worries over corporate spending on artificial intelligence. The S&P 500 ended the week at 7,623.68. With just one week remaining in the month the market benchmark is down 0.4% for October but up 11% this year.
Worries ramped up over increasing capital expenditures as more companies released quarterly results, especially in relation to artificial intelligence. The week's drop came on declines in just four of the S&P 500's 11 sectors. Communication services tumbled 6.2% and industrials fell 1.9%. Technology and materials also edged lower.
Gainers were led by the energy and health care sectors, up 1.55% and 1.45%, respectively. Real estate, utilities, financials, consumer discretionary and consumer staples also edged higher. The energy sector's advance came as crude futures rose amid geopolitical tensions.
Brent crude briefly topped $117 per barrel on October 23, its highest level since April, as escalating tensions involving Iran and attacks near key Middle Eastern shipping routes raised concerns about supply disruptions. Higher energy prices threaten to increase transportation costs and inflation, potentially squeezing corporate margins and complicating the Federal Reserve’s interest-rate decisions.
September housing starts fell 5.2%, while pending home sales dropped 7.3% to their lowest level since records began in 2001, as elevated mortgage rates continued to weigh on demand. Weakness in both construction and homebuying suggests housing could remain a drag on economic growth as long as borrowing costs stay elevated.
Anthropic filed it’s Public S-1 on Monday morning, clearing the way for it’s highly anticipated Initial Public Offering scheduled for mid to late November. Reports suggest the company could be valued near $2 Trillion which could match or exceed the Space X IPO earlier this year.
This week, Verizon Communications, Visa, Coca-Cola, Boeing, Google parent Alphabet, Microsoft, GE Vernova, Amazon.com, Eli Lilly, Mastercard, Intel, Merck, Caterpillar, ExxonMobil, Chevron and AbbVie are among companies releasing quarterly results.
Economic data will include September personal consumption expenditures and the advance estimate of Q3 gross domestic product. There will also be a two-day meeting of the Federal Reserve's Federal Open Market Committee that concludes Wednesday.
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