The S&P 500 index edged up 0.2% last week and recorded a 2.3% monthly gain amid optimism for Federal Reserve officials to deliver an interest-rate cut in September.
August was the S&P’s seventh positive month of 2024 with the only decline in April. The index is up 18% this year.
Gains in recent weeks have been spurred partly by speculation that the Federal Reserve’s policy-setting committee will begin cutting rates at the September meeting. Fed Chair Jerome Powell said two weeks ago “the time has come” for rate cuts.
Last week’s economic data appeared to bolster those prospects. Consumer spending rose as expected in July, while the Fed’s preferred inflation metric, personal consumption expenditures, unexpectedly held steady at the annual level.
Financial stocks climbed 2.9% for the week, leading sector gains. Industrials rose 1.7% with materials up 1.6%. Health care, energy and utilities advanced about 1% each, while consumer staples added 0.8% and real estate edged up 0.4%.
The technology sector fell 1.5%, communication services declines 0.7% and consumer discretionary shed 0.2%.
The US stock market was closed yesterday for the Labor Day holiday. Economic data due the rest of this week include July construction spending and factory orders, though investors will be most focused on the August employment report due at the end of the week.
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