The S&P 500 fell 2.0% this week, and Information Technology (MW) took the biggest hit. The sector fell 6.4%, the worst of the 11 sectors (chart). The iShares Semiconductor ETF (SOXX) fell 11.8%. Credit worries spread to AI infrastructure. CoreWeave fell 25% last week. Its worst day was Wednesday, when it sank 15% as its bond yields soared. It was the IT sector's second straight losing week. Industrials (OW) also fell for a second week. On a ytd basis, Energy is up 52.7%, the best of the 11 sectors. IT is second at 21.6% (chart).
Consumer Staples (UW) and Energy (OW) led the 11 sectors, each up 5.0%. Health Care (OW) rose 3.4%. Every defensive sector gained, with Utilities (MW) up 2.0% and Real Estate (UW) up 1.2%. Health Care and Staples rallied for different reasons. Earnings drove Health Care's gains. Staples' gains have been driven by its multiple.
Here's more on Information Technology, Health Care, and Consumer Staples:
(1) Information Technology. The tech selloff last week was led by Semiconductor Equipment (down 17.4%) and Communication Equipment (down 13.3%) (chart). IT Consulting & Other Services rose 5.6%, and Technology Hardware slipped only 1.5%.
Two weeks ago, Semiconductor Equipment was the best-performing IT industry, up 97.3% ytd. It is now up 51.6%. Its forward P/E has fallen to 27.0 from 31.1. Its earnings outlook hasn't changed. Analysts still expect growth of 35.0% this year and 48.5% next year (chart).
