The Friday rally didn’t save the week Despite a rally on Friday, the S&P 500 Index ended the week lower on comments from Fed Chair Jerome Powell that suggested a pivot to cutting rates might not occur as quickly as the market had hoped. Unease around the U.S. debt ceiling may also have weighed on sentiment, as U.S. Treasury Secretary Janet Yellen notified congressional leaders in a letter that the agency might not be able to meet its debt obligations “potentially as early as June 1.” Within the S&P 500, Tech stocks fared the best while Energy shares pulled back in sympathy with the price of WTI crude oil.

Stocks recorded mixed returns this week as attention focused on earnings reports. 35% of S&P 500 Index companies (or 44% of its market capitalization) were scheduled to release results during the week. Meta and Microsoft jumped while other FAANGs were mixed. Cyclical sectors generally performed poorly, however, as investors weighed several new signs of an economic slowdown.

The major US equity indices ended mixed following a week while the Cboe Volatility Index (VIX), Wall Street’s so-called fear gauge, fell to its lowest level since late 2021. 88 S&P 500 Index companies had reported earnings as of Friday. Financials outperformed overall during the week despite a brief plunge in shares of Goldman Sachs after the investment banking giant missed consensus revenue estimates.

The Dow Jones was up for a 4th week in a row as investors weighed slowing growth signals against signs that inflation pressures were receding a bit more than expected. In the US, Materials and industrials shares outperformed while Technology lagged mainly due to NVIDIA decline. Banking giants JPMorgan Chase, Wells Fargo, and Citigroup kicked off Q1 earnings season. All three topped consensus estimates and brought some relief to investors.

The major US equities indices were mostly lower over a holiday-shortened week that was characterized by light and choppy trading. Several important economic releases weighed on sentiment. On Monday, the ISM gauge of March factory activity fell back to a nearly three-year low. The ISM’s services sector gauge, released two days later, indicated that the services sector was still expanding, but at a significantly slower-than-expected pace.

US equities posted solid gains in a relatively quiet week for economic data releases and financial news. Small-caps outperformed large-caps, and value stocks advanced modestly more than growth stocks. Rising oil prices boosted energy stocks. U.S. WTI crude oil rose more than 9% for the week, climbing back above the USD 70 per barrel level. Over the quarter, the Nasdaq Composite index jumped more than 16%, while the S&P 500 Index rose approximately 7%.

US equity returns varied widely over the week as banking industry and recession worries weighed on value stocks and small-caps, while large-cap growth stocks benefited from falling interest rates. Financials underperformed for a third consecutive week while the average stock remained significantly weaker than the S&P 500 Index’s return suggests.

US stocks closed mixed for the week, reflecting the crosscurrents of stresses in the banking sector, worries that a steeper slowdown in the economy would follow, and hopes that the Fed would now be forced to pause its rate-hiking cycle. Sector returns within the S&P 500 Index varied widely: mega-cap tech stocks recorded strong gains while financials and energy shares suffered significant losses.

Stocks pulled back sharply over the week, as investors absorbed more hawkish talks from Jerome Powell and signs that the Fed still had work to do in cooling inflation. The S&P 500 Index fell on Friday to its lowest intraday level since January 5 as the selling accelerated after the index broke both its 100-day and 200-day moving averages. Financials led the declines and contributed to the pronounced weakness in value stocks.

Main US equity benchmarks closed the week higher and regained some ground following their worst weekly decline in two months. Energy and materials shares outperformed. Economic reports were mixed. US durable goods orders posted their steepest decline since April 2020. The ISM Manufacturing PMI ticked higher in February for the 1st time since May (although it remained in contraction territory at 47.7) while services PMI fell slightly but less than consensus expectations and still indicated moderate expansion (55.1).