• Trading volume tumbles to slowest daily average of year
  • Gauge budges less than 1 percent in nine straight sessions

You knew it had to end sometime.

The Standard & Poor’s 500 Index fell 0.7 percent in the holiday-shortened week, halting a rally that added more than $2 trillion in value to U.S. stocks. The energy producers that led equities to the longest winning streak in four months fell the most, as crude was little changed in the period.

“The rally has gotten a little tired. We’ve had a V-shaped year and the market has rebounded back in short order, so you have a natural tendency for it to consolidate,” said David Donabedian, chief investment officer of Atlantic Trust Private Wealth Management, which oversees about $27 billion. It’s also not coincidental that stocks fell as crude oil’s rally from a 12-year low stalled, he said. “That correlation remains very tight.”

The S&P 500 ended the week on a three-day slide to erase a gain for the year, closing Thursday at 2,035.94. The Dow Jones Industrial Average slipped 86.57 points, or 0.5 percent, to 17,515.73, trimming its advance in 2016 to 0.5 percent.

With economic data limited, comments from Federal Reserve officials set the tone on global financial markets. A chorus of policy makers signaled the central bank stands ready to raise rates as soon as the data warrant, just a week after the Fed scaled back the path for interest-rate increases, spurring demand for riskier assets from equities to commodities.

“This week had a lot more tone from Fed members that seemed to indicate they were a little more hawkish and that was a little bit of a structural headwind,” said Eric Wiegand, senior portfolio manager at the Private Client Reserve of US Bank in New York.

The Fed comments sent the dollar to its best week since November, damping demand for resources denominated in the greenback, including crude. The five worst performers in the S&P 500 were energy shares, with Williams Cos. and Marathon Oil Corp. slumping at least 11 percent. The group lost 2.4 percent, ending its own five-week rally that pushed prices to the highest since Dec. 4.

“You had to to suspect it was going to pull back a little bit,” said Bruce Bittles, chief investment strategist at Milwaukee-based Robert W. Baird, which oversees $110 billion. “Both stocks and oil were overbought coming into the week.”

The decline paled compared with the six-week selloff that sent U.S. equities to the worst-ever start to a year, with the biggest daily slide in the S&P 500 limited to 0.6 percent. The index capped a run of nine sessions without a swing of at least 1 percent, the longest since June, after opening the year on pace to set a record for volatility. Trading was muted, as well, with an average of 6.4 billion shares changing hands on U.S. exchanges over the four days.

As investors await the start of first-quarter earnings next month, the market could trade in a similarly tight range, Bittles said. Alcoa Inc. is scheduled to report on April 11.

Economic data didn’t do anything to change investor sentiment, inhibiting conviction in the market’s direction heading into a long weekend, Wiegand said. Housing data showed a mixed picture, while orders for durable goods reflected lingering softness in the manufacturing industry.

Even the terrorist attacks in Brussels did little to move the market, a sobering takeaway that investors aren’t shocked by such events anymore, Donabedian said.

Rather, the week provided some respite in a year that’s been “frustrating for nearly everyone” amid a market that’s been defined by its “feast-or-famine” nature, Wiegand said.

“We haven’t gotten information that will confirm either the strength that the optimists are looking for or the weakness that the pessimists are looking for,” he said. “The absence of that has given everyone time to pause, reflect and the reaction has been less volume.”

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