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Market Recap
WEEK OF JUN. 19 THROUGH JUN. 23, 2023
The S&P 500 index shed 1.4% this week as Federal Reserve officials indicated more interest rate increases ahead despite the central bank's recent decision to hold rates steady.
The market benchmark ended Friday's session at 4,348.33, down from the previous week's close of 4,409.59. Even with the weekly decline, the index is still up 4% in June and 13% this year.
The weekly drop came as Federal Reserve Chair Jerome Powell said at a Senate Banking Committee hearing that "there's a little further to go with rate hikes" following the Federal Open Market Committee's decision to hold rates steady last week after 10 consecutive increases.
Adding to concerns, Federal Reserve Gov. Michelle Bowman said she supported the Federal Open Market Committee's decision to leave interest rates steady, but further increases will be needed to bring inflation down to the agency's target rate. Investors worry that further increases will slow the economy too much.
The S&P 500's real estate sector fell 4%, the largest percentage drop of the week. Energy followed, falling 3.4%. Other decliners down by more than 2% included utilities, financials and technology. Health care was the only sector that was up for the week, rising 0.2%.
The real estate sector's decliners included shares of Federal Realty Investment Trust (FRT), which shed 6.1% this week as Raymond James lowered its price target on the stock to $115 per share from $120. The firm, however, kept its investment rating on the shares at strong buy.
The energy sector's drop came as crude oil futures fell. Decliners included shares of Phillips 66 (PSX), down 6.5%, and Marathon Oil (MRO), which lost 6.6%.
On the upside, the health care sector's gainers included shares of Merck (MRK), which rose 4.8% as the pharmaceutical company completed its $10.8 billion acquisition of Prometheus Biosciences (RXDX) and said a late-stage trial of its Keytruda treatment in patients with advanced resectable gastric or gastroesophageal junction adenocarcinoma met one of its primary endpoints.
Economic data next week will be light early but will build toward the end of the week with the closely watched consumption expenditures index -- an inflation indicator -- set to be released on Friday. Other reports will include May durable goods orders and new home sales on Tuesday as well as May pending home sales on Thursday.
