Small-caps drove the stock market to new all-time highs this week. The Russell 2000 Index gained 2.78 percent. The S&P 500 Index saw a smaller increase of 0.68 percent. SPDR Financials (XLF) climbed 1.65 percent on the week, and SPDR S&P Regional Banks (KRE) advanced 4.30 percent.
In the futures market, the odds of a December rate hike were still over 70 percent on Friday. The 10-year Treasury yield climbed above 2.3 percent, up from 2.2 percent last week.
Rising interest rates pushed the U.S. dollar to a 2-month high. Currency weakness was concentrated in emerging markets, led by a decline in the Chinese yuan. WisdomTree Emerging Currency (CEW) fell 1.40 percent. iShares MSCI Emerging Markets (EEM) is down 1.26 percent.
Durable goods orders in August increased 1.7 percent, better than expectations. New home sales data was weaker than expected, but investors brushed off the news. iShares U.S. Home Construction (ITB) gained 4.46 percent on the week and hit a new 52-week high. Initial claims for unemployment were 272,000 the week prior, in line with expectations. Second-quarter GDP growth was revised higher to 3.1 percent, also matching expectations.
Energy rallied, but signs of weakness appeared late in the week. SPDR Energy (XLE) climbed 1.87 percent. West Texas Intermediate crude closed above $50 for the second week, but shares remain heavily overbought.
Micron Technology (MU) beat earnings estimates by 15 percent this week. iShares Semiconductors (SOXX) hit a new 52-week high on Friday. Nike beat estimates by 19 percent, but shares fell after revenues in North America reportedly fell.
Biotechnology rallied 1.14 percent this week. Healthcare providers advanced 1.88.