The Dow Jones Industrial Average eked out a slim gain this week while the S&P 500 and Nasdaq saw modest declines. This week featured plenty of market-moving events, capped off with a quarterly options and futures expiration day on Friday. It resulted in the S&P 500 and Nasdaq closing below their 50-day moving averages.
Despite a lower finish for the indices, eight of the 11 S&P 500 sectors closed with a gain. Information technology, which is the most heavily weighted sector, declined 2.2%. Weakness among the semiconductors also contributed to the sector’s underperformance. That weakness followed Arm’s (ARM) successful IPO on Thursday and a newsreport that Taiwan Semiconductor Manufacturing Co. (TSM) is delaying chip equipment shipments. The Semiconductor Index fell 2.5%. Netflix (NFLX), which is among the top performers this year, tumbled 10.4% this week after its disclosure that the ad business is not material yet to its overall revenue.
Market participants also digested a slate of economic releases. Chief among them was the August Consumer Price Index report. Briefly, total CPI was up a robust 0.6%, as expected, and core-CPI, which excludes food and energy, was up 0.3% (consensus 0.2%). That left total CPI up 3.7% year-over-year, versus 3.2% in July, and core CPI up 4.3% year-over-year, versus 4.7% in July.
The takeaway from the report is that core inflation, which is what the Fed monitors more closely, showed ongoing improvement on a year-over-year basis; however, it is still well above the Fed’s 2.0% target.
Finally, the United Auto Workers launched targeted strikes at three manufacturing plants (one for each of the Big Three US Automakers) after being unable to reach a deal on a new contract with the automakers. Ford (F), Stellantis (STLA), and General Motors (GM) still closed with gains of 2.5%, 5.6%, and 3.0%, respectively, this week.