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The major U.S. stock market indexes logged another week of losses, as the annual rate of U.S. inflation rose to a 40-year high of 7.9% in the all-items consumer price index, and traders price in at least a 25 basis point hike in the federal funds rate at next week’s meeting of the Fed’s rate-setting Open Market Committee.
Energy prices remained elevated, though backing off somewhat from previous highs. Crude oil closed Friday at US$109.90 per barrel, down 5.1% on the week, keeping the energy sector on the plus side in both Canada and the U.S. It was not enough to prop up the S&P 500 Composite Index, which lost another 1.3% on the week, led by a 5.8% weekly loss in the Consumer Staples sector, and is now in a correction phase, down over 10% from its recent high. Similarly, the Nasdaq Composite Index fell 3.5% on the week as the Information Technology sector logged a 3.8% loss on the week, and is approaching bear market territory with a year-to-date loss of 18%.
Meanwhile, Toronto’s S&P/TSX Composite Index remained in the black for the week, posting a gain of 0.3%, as its heavy energy component kept the index aloft, supported by strength in Consumer Staples and Utilities.
Gold advanced 0.9% on the week, closing just below the US$2,000 per ounce mark, as traders slowed down their heated purchases of the yellow metal, at least for now.
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