S&P 500 sinks nearly 5% for the week in bear market rally, with all eyes now on Fed

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The S&P 500 (SP500) on Friday posted its worst weekly performance since mid-June, slumping 4.78% for the five-day session. The losses came on the back of a solid 3.65% gain last week. Investors dumped equities in three of the five sessions.

A chunk of the week’s selling came on Tuesday on the heels of a hotter than anticipated consumer price inflation report, with the headline print for Aug. rising 8.3% Y/Y. Focus is now on the U.S. Federal Reserve’s policy meeting decision next week on Wednesday, with most market participants anticipating a significant rate hike of up to 75 basis points.

The yield curve inversion also accelerated during the week, with the spread between the U.S. 30-year Treasury yield (US30Y) and the U.S. 5-year Treasury yield (US5Y) hitting its widest point since 2000 on Thursday.

A Deutsche Bank survey on Monday warned that there was no bottom for the S&P 500 (SP500) yet, with only 9% of respondents thinking that the index had hit its lows for the cycle.

Investors also digested other economic data such as producer price index numbers for Aug., a rise in Aug. retail sales, a plunge in the Philly Fed’s measure of manufacturing activity, an unexpected fall in Aug. industrial production, and consumer sentiment data that fell short of expectations.

The SPDR S&P 500 Trust ETF (NYSEARCA:SPY) on Friday fell 5.17% for the week alongside the benchmark index. The ETF is -18.82% YTD.

All 11 sectors in the S&P 500 closed in the red for the week, with Real Estate and Materials the top losers. See below a breakdown of the weekly performance of the sectors as well as the performance of their accompanying SPDR Select Sector ETFs from Sept. 9 close to Sept. 16 close:

#1: Health Care -2.38%, and the Health Care Select Sector SPDR ETF (XLV) -2.34%.

#2: Energy -2.60%, and the Energy Select Sector SPDR ETF (XLE) 2.68%.

#3: Consumer Staples -3.63%, and the Consumer Staples Select Sector SPDR ETF (XLP) -3.58%.

#4: Financials -3.81%, and the Financial Select Sector SPDR ETF (XLF) -3.78%.

#5: Utilities -3.82%, and the Utilities Select Sector SPDR ETF (XLU) -3.76%.

#6: Consumer Discretionary -4.15%, and the Consumer Discretionary Select Sector SPDR ETF (XLY) -3.98%.

#7: Information Technology -6.12%, and the Technology Select Sector SPDR ETF (XLK) -6.19%.

#8: Industrials -6.38%, and the Industrial Select Sector SPDR ETF (XLI) -6.38%.

#9: Communication Services -6.43%, and the Communication Services Select Sector SPDR Fund (XLC) -6.26%.

#10: Real Estate -6.48%, and the Real Estate Select Sector SPDR ETF (XLRE) -6.25%.

#11: Materials -6.65%, and the Materials Select Sector SPDR ETF (XLB) -6.62%.

Below is a chart of the 11 sectors’ YTD performance and how they fared against the S&P 500. For investors looking into the future of what’s happening, take a look at the Seeking Alpha Catalyst Watch to see next week’s breakdown of actionable events that stand out.