Market Extra

Stock-market slide: All S&P 500 sectors are down in August, on pace for a broad monthly drop not seen this year

The S&P 500’s utilities sector has slid 6.1% this month through Tuesday

Each of the S&P 500’s sectors has dropped so far this month, after the broad index saw a 2023 peak in July.

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All of the S&P 500’s sectors are down in August in a sweeping stock-market tumble not seen since the end of last year, after the index surged in the first seven months of 2023. 

The last time all 11 of the S&P 500’s sectors fell in the same month was December, according to Dow Jones Market Data. Utilities, information technology and materials are showing the biggest losses so far in August, according to FactSet data.

The S&P 500 soared 19.5% this year through July, its strongest performance through the first seven months of any year since 1997. But the index has stumbled this month amid a jump in Treasury rates, as macroeconomic concerns weigh on investors awaiting comments from Federal Reserve Chair Jerome Powell on Friday.

The Fed raised interest rates again in July to fight still-elevated, but easing, inflation. Many investors this year have been anticipating that the Fed is nearing the end of its hiking cycle, as it has slowed the pace of lifting its benchmark rate this year.

While megacap Big Tech stocks propelled the stock market earlier in 2023, August’s drop has seen the S&P 500’s 11 sectors weighed down with losses ranging from less than 1% to more than 6%. Nine of them have a monthly decline of at least 4% through Tuesday, including a 6.1% fall for utilities, according to FactSet data.

The S&P 500’s information-technology and materials sectors have each slumped around 5.9% in August, while real estate is down 5.8% this month through Tuesday. 

So-called Big Tech stocks, which include companies such as Apple Inc. AAPL, -2.92%, Nvidia Corp. NVDA, -1.74%, Tesla Inc. TSLA, -0.17% and Google parent Alphabet Inc. GOOG, +0.61% GOOGL, +0.59%, span across the S&P 500’s information-tech, consumer-discretionary and communication-services sectors. 

Also read: Apple only Big Tech stock ‘really hitting’ the S&P 500 as ‘little’ about August’s market slump appears worrisome, says DataTrek

The S&P 500’s best-performing sectors this month to date are energy, with a 0.4% decline, and healthcare, with a fall of around 0.8%, according to FactSet data.

The U.S. stock market ended Tuesday mostly lower as shares of banks slid following the decision of S&P Global Ratings to downgrade some smaller firms in the banking sector.

The Dow Jones Industrial Average DJIA closed down 0.5%, while the S&P 500 SPX slipped 0.3% and the tech-heavy Nasdaq Composite COMP edged up 0.1%. Financial stocks in the S&P 500 fell 0.9% on Tuesday, the broad index’s worst-performing sector for the day, according to FactSet data. 

Tuesday’s close left the broad S&P 500 off about 4.4% from its 2023 closing high on July 31, but still up 14.3% for the year, according to Dow Jones Market Data.