The S&P 500 index edged down 0.1% last week as investors digested higher-than-expected inflation readings for February. The market benchmark is still up 0.4% for the month and 7.3% for the year.
US consumer prices for February were up 3.2% year-over-year, slightly above a 3.1% increase in January and the consensus estimate for a 3.1% increase. The US producer price index was up 1.6% on an annual basis last month after a 1% increase in January. Analysts were projecting growth of 1.2%.
Market watchers believe the inflation data may lead the Federal Reserve to keep its policy rate on hold until members see further signs that price growth is trending lower.
The real estate sector had the largest percentage drop of the week, down 3.1%, followed by a 1.2% decline in consumer discretionary. Other sectors that fell included health care, utilities, technology and industrials.
On the upside, however, the energy sector jumped 3.7%, followed by a 1.5% rise in materials. Other gainers included communication services, consumer staples and financials.
The energy sector’s climb came as crude oil futures also rose.
Attention this week will be on the Federal Reserve as its policy-setting committee will have a two-day meeting that will conclude on Wednesday with an interest-rate decision. Economic reports will be heavy on housing data, with the February home builder confidence index due on Monday, February housing starts and building permits on Tuesday and February existing home sales on Friday.
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