The Standard & Poor's 500 index slipped 0.8% this week, led to the downside by the health care and materials sectors.
The S&P 500 ended the week at 7,656.98. This is the index's first weekly decline since the week ended Aug. 21. It's now down 0.4% for September but up almost 12% this year.
Data released Friday showed US consumer prices rose 0.4% month over month in August, the fastest pace since May and matching expectations. Core inflation, which excludes the more volatile food and energy components, jumped to a four-month high of 0.3%, exceeding market projections for an unchanged 0.2% growth.
Expectations for a rate increase at the Federal Reserve's next Federal Open Market Committee meeting, which is set for next week, rose after the inflation report. Bets for the US central bank to increase its benchmark lending rate by 25 basis points next week jumped to 87% Friday from 72% Thursday, according to the CME FedWatch tool.
US consumer sentiment weakened in September, while inflation expectations rose, with the year-ahead price growth outlook reaching the highest reading since June, preliminary results of a University of Michigan survey showed Friday.
By sector, health care had the largest percentage drop of the week, falling 3.6%, followed by a 2.7% decline in materials. Industrials and utilities shed 1.7% each, financials fell 1.5%, consumer discretionary declined 1.2% and real estate slipped 1.1%. Consumer staples and technology also edged lower.
Cooper (COO) led the decliners in health care and also had the largest percentage drop in the overall S&P 500 for the week, tumbling 23% amid weaker-than-expected fiscal Q3 sales. The company also lowered its full-year outlook.
Corteva (CTVA) was among the decliners in the materials sector, slipping 4.5%. Chemours (CC), DuPont de Nemours (DD) and Corteva said they have agreed to a $455 million settlement with North Carolina and 11 local entities to resolve PFAS-related claims. Shares of Chemours and DuPont also declined on the week.
Just two sectors rose as energy climbed 2% and communication services gained 1.1%.
The energy sector's advance came as crude oil futures rose on the week. The White House is mulling ways it can use the Defense Production Act to expand US oil refining capacity, Reuters reported, citing two sources familiar with the plans. Saudi Arabia's Energy Ministry said on Friday its East-West pipeline was shut after multiple attacks, according to media reports.
The energy sector's top gainers included Valero Energy (VLO), which rose 5.3%, and APA (APA), which climbed 4.6%.
All eyes next week will be on the two-day FOMC meeting set to conclude on Wednesday. Economic data will include August retail sales, pending home sales, industrial production and capacity utilization.