Market Recap Week of 9/12/2022 Through 9/16/2022

The S&P 500 index fell 4.8% last week, wiping out the previous week’s 3.6% climb, as investors were spooked by a report of higher-than-expected consumer price inflation in August as well as a profit warning by package delivery company FedEx (FDX).

It is now down 2.1% for the month to date and down 19% for the year to date.

The week included the largest one-day drop in the S&P 500 index since June 2020, coming Tuesday after data from the Labor Department showed US consumer prices unexpectedly edged higher in August versus July amid broad-based monthly gains, while core inflation accelerated more than expected, boosting expectations that the Federal Reserve would push forward with a more aggressive tightening cycle.

The data showed the consumer price index rose 0.1% in August on a monthly basis. This compared with a flat reading in July and an Econoday consensus estimate for a 0.1% drop. It also showed annual inflation advanced 8.3% last month, lower than an 8.5% jump in July, but higher than the Street’s view for an 8.1% increase.

Adding to investors’ worries later in the week, FedEx (FDX) preliminarily reported results for its fiscal Q1 ended Aug. 31 below analysts’ expectations and withdrew its fiscal 2023 earnings guidance. The company also disclosed cost-cutting measures after preliminary data showed a decline in global volume accelerated in the final weeks of the quarter.

All of the S&P 500’s sectors fell last week, with materials leading the way lower with a 6.7% drop. Other top decliners included real estate, down 6.5%, while communication services and industrials fell by 6.4% each and technology shed 6.1%.

Next week, all eyes will be on a meeting of the Federal Reserve’s policy-setting body, the Federal Open Market Committee. Housing data will also be in focus, with August building permits and housing starts scheduled for release Monday, followed by August existing home sales on Tuesday. On Friday, S&P Global will conclude the week with a release of its September readings on US manufacturing and services.

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