The Standard & Poor's 500 index fell 2% for its second straight weekly decline amid worries about future Federal Reserve monetary policy and a potential government shutdown.
The market benchmark ended the week at 5,930.85 and is now down 1.7% for December, but still solidly in positive territory for 2024 with a year-to-date climb of 24%.
The Federal Open Market Committee on Wednesday reduced the central bank's benchmark lending rate by 25 basis points, as expected.
The policy-setting committee, however, also signaled fewer cuts in the next few years than previously projected. Policymakers also raised their projection for inflation, as measured by personal consumption expenditures, to 2.4% from 2.3% this year and to 2.5% from 2.1% for 2025. These moves prompted investor concerns and sent stocks lower.
Adding to market worries, a potential government shutdown loomed after a bipartisan deal for funding through mid-March fell apart earlier in the week and a bill proposed by House Republicans to fund the government for three months failed late Thursday.
All of the S&P 500's sectors declined on a weekly basis, led by a 5.6% drop in the energy sector, a 5% slide in real estate and a 4.2% fall in materials. Other sectors down by at least 2% each included industrials, consumer discretionary, consumer staples, health care, communication services and financials.
Phillips 66 (PSX) shares were the hardest-hit in energy, shedding 10% for the week. The company said it agreed to sell DCP GCX Pipeline, which holds a 25% non-operated stake in the Gulf Coast Express Pipeline, to an ArcLight Capital Partners affiliate for pre-tax proceeds of $865 million in cash, subject to adjustments.
In real estate, VICI Properties (VICI) shares fell 7.5% as KeyBanc downgraded its investment rating on the stock to sector weight from overweight. VICI Properties also said its VICI Properties LP unit closed a $750 million public offering of 5.125% senior unsecured notes due 2031.
Nucor (NUE) and Steel Dynamics (STLD) were among decliners in the materials sector as both steel production companies issued fourth-quarter profit outlooks below analyst expectations amid lower prices. Nucor's shares fell 6.9% while Steel Dynamics' shares shed 5.5%.
Next week, markets will close three hours early on Wednesday, Dec. 24, and be closed on Wednesday for Christmas.
Amid the holiday-related closures, economic data will be light but will include December consumer confidence on Monday, November durable goods orders and new home sales on Tuesday, weekly jobless claims on Thursday and the November US trade balance in goods on Friday.
