The S&P 500 closed out a brutal third quarter on a low note this past week, hitting new 52-week lows.
On Friday, the Bureau of Economic Analysis reported the personal consumption expenditures (PCE) price index gained 6.2% year-over-year in the month of August, down from a 6.3% PCE inflation in July. Core PCE, which excludes volatile food and energy prices and is the preferred inflation measure for the Federal Reserve, was up 4.9% in August, exceeding economist estimates of a 4.6% rise.
The British pound dropped to new all-time lows against the U.S. dollar on Monday in response to new U.K. Prime Minister Liz Truss' bold new economic stimulus plan that included aggressive tax cuts and investment incentives. To stabilize the bond and currency markets, the Bank of England announced on Wednesday that it will suspend its planned bond selling program and will instead begin buying long-dated U.K. government bonds.
Concerns over economic instability in the U.K. sent 10-Year U.S. Treasury yields above 4% in midweek trading before they retreated to 3.73% to finish the week. The S&P 500 also hit a new 52-week low of 3,610.40 on Thursday, its lowest intraday level since 2020.
Bank of America downgraded Apple from "buy" to "neutral" on Thursday, triggering a sharp sell-off in tech stocks. In the downgrade note, BofA analyst Wamsi Mohan said he expects "weaker consumer demand" will prompt analysts to cut their Apple earnings estimates in coming quarters.
Not Rite now
Rite Aid shares traded lower by more than 29% on Thursday after the pharmacy retailer reported a larger-than-expected second-quarter net loss and cut its full-year earnings guidance.
Investors will get more quarterly earnings reports in the week ahead from Lamb Weston on Wednesday, Conagra Brands and Levi Strauss on Thursday and Tilray on Friday.
Wall Street analysts currently project an average of 25.7% upside for the S&P 500 over the next 12 months, according to FactSet.
Following the disappointing PCE reading, investors will get more key economic updates on Thursday when Eurostat releases its August Retail Sales report and on Friday when the U.S. Labor Department releases its September jobs report.
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Benzinga is a financial news and data company headquartered in Detroit.
This article originally appeared on Detroit Free Press: Downgrade of Apple stock triggers sharp tech stock sell-off