The S&P 500 index shed 1.4% last week as Federal Reserve officials indicated more interest rate increases ahead despite the central bank’s recent decision to hold rates steady.
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.
Related: CPI Report Data Shows Inflation Rose 4% Annually, Lowest in Two Years
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%.
Economic data this 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.
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