S&P 500 Logs Weekly Loss As Investors Digest Latest Jobs Data

Zinger Key Points
  • Economic data is coming in stronger than expected, Fed Chair Jerome Powell told Congress this week.
  • Key economic updates next week include the February CPI reading Tuesday and February retail sales on Wednesday.

The SPDR S&P 500 ETF Trust SPY traded lower in a volatile week as concerns over the U.S. regional banking industry rattled Wall Street.

On Thursday, SVB Financial Group SIVB announced plans to raise $2 billion in capital to offset $1.8 billion in losses on bond sales, sending the stock down 60% on the day. SVB shares were plunging again Friday before the stock was halted and the company’s Silicon Valley Bank was shut down by regulators.

On Wednesday, cryptocurrency lender Silvergate Capital Corp SI announced it is liquidating its assets and winding down its operations. Silvergate is the latest victim in the fallout from the collapse of Sam Bankman-Fried's FTX crypto exchange in November 2022.

In his Semiannual Monetary Policy Report to Congress on Tuesday and Wednesday, Federal Reserve Chair Jerome Powell said the latest batch of U.S. economic data "have come in stronger than expected," and the Fed will likely be forced to raise interest rates "higher than previously anticipated." Stocks tumbled following Powell's remarks as investors braced for the possibility the Fed will raise rates by 0.5% at its next meeting later this month.

On Friday, the Labor Department reported the U.S. economy added 311,000 jobs in February, far exceeding economist estimates of 200,000 new jobs. U.S. wages grew 4.6% year-over-year, while the unemployment rate ticked higher from 3.4% to 3.6%.

Foods Gone Bad: Shares of organic and natural foods distributor United Natural Foods Inc UNFI declined more than 20% on Wednesday after the company cut its 2023 profit guidance and dropped its long-term financial targets.

In the week ahead, investors will see more quarterly reports from Lennar Corp LEN on Tuesday, Adobe Inc ADBE on Wednesday, FedEx Corp FDX on Thursday and Xpeng Inc - ADR XPEV on Friday.

Analysts have cut their S&P 500 earnings estimates for the first quarter by 5.7% since the beginning of the year, according to FactSet.

Economic Numbers: Investors will get key economic updates on Tuesday when the U.S. Labor Department releases its February Consumer Price Index reading and on Wednesday when the Census Bureau releases its February U.S. Retail Sales report.

Photo via Shutterstock.

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