Market Recap Week of 9/19/2022 Through 9/23/2022

The S&P 500 index fell 4.6% last week as the Federal Open Market Committee increased its key lending rate by another 75 basis points and signaled more tightening is ahead while a number of central banks elsewhere also boosted rates to try to combat inflation.

This follows a 4.8% tumble from the week prior, ahead of the FOMC meeting and puts the market benchmark’s slide over the last two weeks at 9.2%. With just one week remaining in the month, this puts the S&P 500’s decline for September to date at 6.6%. The index is now down by nearly 23% for the year to date.

Last week’s slide came as the FOMC, the US Federal Reserve’s policy-setting committee, delivered its third consecutive 75-basis-point rate increase while also sharply raising its year-end benchmark lending rate outlook. The federal funds rate is now in a range of 3% to 3.25% while the year-end target for the rate is now at 4.4%, up from 3.4% previously.

The rate increase by the Fed’s FOMC was followed by similar moves globally by officials at other central banks, including the Bank of England.

On Friday, investors‘ concerns about the impact on global economic growth escalated as data showed a sharp decline in economic activity in Europe, raising the risk of a recession there.

All of the S&P 500’s sectors fell on the week. Energy had the largest percentage drop, down 9%, followed by a 7% slide in consumer discretionary and a 6.4% fall in real estate. The slimmest decline was in consumer staples, which shed 2.1%.

Next week, the final week of Q3, the market will receive key data on the housing market, economic growth and inflation. Tuesday will feature releases of August new home sales as well as the S&P Case Shiller US home price index for July, followed by the pending home sales index for August on Wednesday.

Thursday, Q2 revised gross domestic product will be released, followed by the Friday release of the Personal Consumption Expenditures or PCE price index, a closely watched inflation reading, for August.

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