Key Highlights

● Oxford Industries fell Friday, with no company-specific announcement, filing or analyst action reported.

● The LSEG/Ipsos consumer sentiment index fell 5.3 points to 45.2, its lowest since October 2011.

● U.S. gasoline averaged $4.33 a gallon, against $3.06 a year earlier.

● The 10-year Treasury yield eased to roughly 5.1 after topping 5.3 earlier in October.

Pressure on consumer names

Oxford Industries (NYSE:OXM), the apparel company behind Tommy Bahama, Lilly Pulitzer and Johnny Was, fell on Friday, according to market reports. Those reports tied the decline to weak consumer sentiment and higher yields, and grouped the S&P SmallCap 600 member with iHeartMedia (NASDAQ:IHRT), AMC Networks (NASDAQ:AMCX), Xponential Fitness (NYSE:XPOF) and WeightWatchers (NASDAQ:WW) among consumer stocks that plummeted.

No company-specific announcement, filing or analyst action on Oxford Industries was reported for the session.

A gloomy sentiment reading

The main macro weight on the group was a slump in consumer confidence. The LSEG/Ipsos Primary Consumer Sentiment Index fell 5.3 points to 45.2, its lowest reading since October 2011. An Interactive Brokers strategist noted that higher rates weigh on financed purchases.

The selling spread across discretionary spending categories. Opendoor Technologies (NASDAQ:OPEN), Compass (NYSE:COMP) and Offerpad (NYSE:OPAD) fell with housing names. Media and leisure stocks including Cable One (NYSE:CABO), iHeartMedia, AMC Networks, AMC Entertainment (NYSE:AMC) and Xponential Fitness declined, and WeightWatchers slumped to $13.09. Consumer discretionary stocks slipped in the final hour.

Fuel prices are another pressure point for household budgets. U.S. gasoline averaged $4.33 a gallon, against $3.06 a year earlier, as Brent crude settled at $109.86.

Rates and inflation

Borrowing costs remain elevated. The 10-year Treasury yield eased to roughly 5.1 on Friday after climbing above 5.3 earlier in October, its highest level since 2002. Inflation data earlier in the week ran hot: September consumer prices rose faster than expected, and producer prices posted their largest monthly gain since March 2022. September retail sales, however, beat forecasts.

Federal Reserve Chair Kevin Warsh declined to signal the outcome of the Oct 28 meeting at an IMF gathering in Bangkok. "I don't prejudge meetings," he said. The Fed raised rates by a quarter point in September, and futures still price roughly one more hike by December.

Market close

Stocks reversed early gains and closed lower. The S&P 500 lost 84.62 points to 7,659.44, the Nasdaq Composite dropped 572.99 points to 26,140.03 and the Dow Jones Industrial Average slipped 175.28 points to 52,002.41. The Russell 2000 fell 45.90 points to about 2,721. No closing level for the S&P SmallCap 600 was available.

Technology led the decline amid concerns about how artificial intelligence spending will be financed, while energy, utilities and consumer staples rose. In retail, Needham initiated coverage of several chains, including Boot Barn (NYSE:BOOT) and Urban Outfitters (NASDAQ:URBN) at Buy, while Williams Trading downgraded Birkenstock (NYSE:BIRK) to Sell.

Oxford Brands Face the Holiday Season

Consumer readings next week include the University of Michigan sentiment survey on Friday, Oct 23, and earnings from Procter & Gamble (NYSE:PG) and Tractor Supply (NASDAQ:TSCO) on Thursday, Oct 22, with footwear maker Deckers (NYSE:DECK) reporting after the close that day. Housing starts are due Oct 20. The Federal Reserve's decision on Oct 28 and the PCE inflation report on Oct 29 will shape the outlook for rates and consumer borrowing.

For Oxford Industries, investors will be watching for signs of how its brands are faring with shoppers heading into the holiday season, with the company's next quarterly report the next detailed update.