The Big Picture
The S&P 500 closed at a record 7,818.93 on Tuesday, its first new high since August, and finished the week at 7,811.54, up 1.2%. The Dow Jones Industrial Average rose 0.9% to 51,654.95 and the Nasdaq Composite added 0.6% to 27,366.17. On the surface that is a market in good health. Underneath, the picture was more guarded: the three best sectors were utilities, consumer staples and energy, technology fell, and the Russell 2000 (an index of 2,000 smaller US companies, which tend to be more sensitive to borrowing costs) lost 0.9% to 2,806.98.
A record led by the market's most defensive corners is unusual, and the reason is not hard to find. Brent crude, the global oil benchmark, ended the week at $104.72 a barrel. The Federal Reserve raised interest rates in September, and minutes from that meeting, released Wednesday, showed most officials expect to raise them again before the year is out. The 10-year Treasury yield, the rate the US government pays to borrow for ten years and the anchor for mortgage and corporate borrowing costs, finished at 5.24%. Stocks are setting records while oil, inflation and interest rates all push the other way, and that tension is the story of the week.