The S&P 500 index rose 1.4% last week as investors cheered a half-point rate cut by Federal Reserve officials. The S&P 500 is now up about 1% for September, which puts the index up nearly 20% for the year to date.
The half-point rate reduction marked the Federal Open Market Committee’s first time lowering rates since 2020 and brings the federal funds rate to a range of 4.75 to 5%.
The S&P 500 had already jumped 4% the week prior, as investors grew more hopeful that the FOMC would not only cut rates last week but would cut them by as much as a half-percentage point. Last week’s advance was smaller, but reflected relief after investors’ hopes were realized.
All but three of the S&P’s 11 sectors rose. The gainers were led by energy, which climbed 3.8%, followed by a 3.7% rise in communication services and a 2.3% advance in financials. Other sectors up by at least 2% included consumer discretionary, industrials, and utilities.
On the downside, real estate fell 1.3%, followed by a 1.2% drop in consumer staples and a 0.6% slip in health care.
This week’s closely watched economic reports will include August’s personal consumption expenditures price index, which is considered the Fed’s preferred measure of inflation, on Friday. Investors will also be looking at the second revision of Q2 gross domestic product on Thursday.
Other data will include September consumer confidence, August new home sales, pending home sales, and September consumer sentiment.
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