Weekly Market Insights

Stocks roared back last week, fueled by upbeat Q4 corporate reports and economic news that stalled inflationary fears.

The Standard & Poor’s 500 Index rose 2.91 percent, while the Nasdaq Composite Index advanced 2.45 percent. The Dow Jones Industrial Average led, picking up 3.69 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, added 2.00 percent.^1,2

Goldilocks is Back

The “Goldilocks” narrative—an economy that’s neither too hot nor too cold—made a comeback last week.

Tuesday’s Producer Price Index report showed that wholesale prices rose less than expected in December—one piece of evidence suggesting a cooling economy.³

Stocks jumped out of the gate Wednesday after the December Consumer Price Index (CPI) report showed core inflation (minus volatile energy and food prices) rose less than expected. Investors also cheered Q4 reports from a handful of money center banks and positive news out of the Middle East.⁴

Stocks took a breather Thursday before pushing higher again on Friday.⁵

The S&P and Dow Industrials had their best week since early November, and the Nasdaq saw its best weekly performance since early December. The yield on the 10-year Treasury note fell roughly 20 basis points over the week.^6,7

Slowing Inflation

Investors welcomed the inflation reports, believing wholesale and consumer prices might trend lower in 2025.

First, producer prices came in at 0.2 percent, which was less than the 0.4 percent increase anticipated. Then consumer prices came in at 2.9 percent, slightly elevated, but the real story was core inflation. When you subtract out food and gas prices, CPI saw its smallest monthly increase since July.⁸

Footnotes and Sources

1. ^{The Wall Street Journal, January 17, 2025}
2. ^{Investing.com, January 17, 2025}
3. ^{CNBC.com, January 14, 2025}
4. ^{The Wall Street Journal, January 15, 2025}
5. ^{CNBC.com, January 17, 2025}
6. ^{MarketWatch.com, January 17, 2025}
7. ^{CNBC.com, January 17, 2025}
8. ^{The Wall Street Journal, January 15, 2025}

Stocks fell for the second consecutive week as a round of fresh economic data stoked inflationary fears among investors.

The Standard & Poor’s 500 Index declined 1.94 percent, while the Nasdaq Composite Index dropped 2.34 percent. The Dow Jones Industrial Average lost 1.86 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, slipped 0.49 percent.^1,2

Inflation Stymies Markets

Stocks rallied broadly to start the week, but two economic reports on Tuesday—job openings and the prices-paid index among service companies—raised fresh inflation concerns. Higher Treasury yields also put pressure on stocks.^3,4

Stocks flattened out on Wednesday. Investors reacted to news that most Federal Open Market Committee members agreed inflation risks had increased, per minutes from the Fed’s December meeting.^5,6

U.S. stock markets were closed Thursday in observance of President Jimmy Carter’s funeral.

On Friday, a warmer-than-expected December jobs report caused investors to question whether the Fed will adjust rates in 2025. News that consumer sentiment ticked down also pushed stocks lower.⁷

When Good Becomes Bad News

The economy added 256,000 jobs in December—100,000 more than economists expected. That’s the second-highest monthly job gain for 2024. Unemployment ticked down to 4.1 percent, which was also better than anticipated.

Job growth and lower unemployment signals good news for the economy but bad news for the markets. A stronger jobs market puts less pressure on the Fed to adjust rates, especially with inflation top-of-mind among investors.^8,9

Footnotes and Sources

1. ^{The Wall Street Journal, January 10, 2025}
2. ^{Investing.com, January 10, 2025}
3. ^{CNBC.com, January 6, 2025}
4. ^{The Wall Street Journal, January 7, 2025}
5. ^{CNBC.com, January 8, 2025}
6. ^{MarketWatch.com, January 8, 2025}
7. ^{CNBC.com, January 10, 2025}
8. ^{The Wall Street Journal, January 10, 2025}
9. ^{TradingEconomics.com, January 10, 2025}

Stocks edged lower last week despite a powerful end-of-week rally.

The Standard & Poor’s 500 Index lost 0.48 percent, while the Nasdaq Composite Index slid 0.51 percent. The Dow Jones Industrial Average fell 0.60 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, dropped 0.90 percent.^1,2

Selling Then Buying

Stocks were under pressure right out of the gate on Monday for no apparent reason other than worries over the loss of year-end momentum. By the end of trading on Monday, markets recovered some losses, but the selling picked up again on Tuesday.^3,4

After being closed for the New Year’s holiday, stocks opened higher for the first trading day of 2025. But sellers gained the upper hand by the end of trading. On Friday, Investors perked up with tech stocks leading a recovery rally that erased most of the week’s losses.^5,6

Megacap’s Mega Influence

Megacap tech stocks have captured many headlines over the last two years as the S&P 500 posted double-digit returns (24 percent for 2023 and 23 percent for 2024).

And for a good reason—megacap tech stocks were doing most of the work. For example, during the past 12 months of trading, more than half (53 percent) of the S&P 500’s return can be attributed to the Magnificent Seven–the seven megacap tech companies that most investors would consider household names.⁷

Footnotes and Sources

1. ^{The Wall Street Journal, January 3, 2025}
2. ^{Investing.com, January 3, 2025}
3. ^{CNBC.com, December 30, 2024}
4. ^{The Wall Street Journal, December 31, 2024}
5. ^{CNBC.com, January 2, 2025}
6. ^{CNBC.com, January 3, 2025}
7. ^{The Wall Street Journal, December 31, 2024}
8. ^{IRS.gov, October 2, 2024}

Stocks notched a slight gain over the holiday week. A tech-driven rally in the first half of the week was clawed back in the second half as investors took profits following the market holiday.

The Standard & Poor’s 500 Index advanced 0.67 percent, while the Nasdaq Composite Index rose 0.76 percent. The Dow Jones Industrial Average added 0.35 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, rose 1.54 percent.^1,2

Ho-Ho, Then No-Go

Stocks rallied during the first half of a shortened holiday trading week. Holiday cheer won out despite news of declining consumer confidence in December, a drop in durable goods, and new home sales reporting below expectations.^3,4

The “Santa rally” lost its ho-ho-go after the midweek holiday. Megacap technology stocks led markets down on Friday, giving back most of the gains from the first half of the week.^4,5

The Real Santa

While Santa got the headlines, the consumer drove the holiday shopping sleigh this year.

Holiday spending—defined by the period from November 1 through December 24—rose 3.8 percent in 2024, compared with 3.1 percent in 2023. Economists closely follow consumer activity since consumer spending makes up roughly two-thirds of total gross domestic product. Market watchers attributed the strong job market and growth in household wealth as the primary drivers of consumer strength.⁶

Footnotes And Sources

1. ^{The Wall Street Journal, December 27, 2024}
2. ^{Investing.com, December 27, 2024}
3. ^{MarketWatch.com, December 23, 2024}
4. ^{CNBC.com, December 26, 2024}
5. ^{The Wall Street Journal, December 27, 2024}
6. ^{MarketWatch.com, December 26, 2024}

Stocks were under pressure last week as the Fed Chair’s hawkish comments unsettled investors ahead of the holiday season.

The Dow Jones Industrial Average received the hardest hit, falling 2.25 percent. The Standard & Poor’s 500 Index lost 1.98 percent, while the Nasdaq Composite Index dropped 1.78 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, retreated an eye-catching 3.38 percent.^1,2

No Santa Yet

Divergence marked the start of the week as megacap tech stocks rallied while the Dow Industrials fell for the eighth-straight session—its longest losing streak since 2018.³

Following its scheduled December meeting, the Fed announced it was cutting short-term rates by a quarter point, as widely expected. However, Fed Chair Jerome Powell also signaled fewer rate reductions next year. “From here, it’s a new phase and we’re going to be cautious about further cuts,” he said in his post-meeting news conference.

The rate news surprised investors, who were anticipating more dovish comments from the Fed Chair.^4,5

Markets were under pressure again early Friday as the spending bill to fund the federal government appeared to stall. But a lower-than-expected inflation update boosted the market and helped erase some of the earlier losses.^6,7

Holiday Cheer

Despite a difficult week, stocks are on track to have their second consecutive year of double-digit returns. Year to date, through Friday’s close, the S&P 500 was ahead by about 24 percent. In 2023, the S&P 500 also tacked on 24 percent for the full year.⁸

Footnotes and Sources

1. ^{The Wall Street Journal, December 20, 2024}
2. ^{Investing.com, December 20, 2024}
3. ^{CNBC.com, December 16, 2024}
4. ^{CNBC.com, December 17, 2024}
5. ^{The Wall Street Journal, December 18, 2024}
6. ^{CNBC.com, December 19, 2024}
7. ^{CNBC.com, December 20, 2024}
8. ^{The Wall Street Journal, December 20, 2024}

Stocks finished the week mixed, bookending losses around midweek gains as investors digested fresh inflation data.

The Standard & Poor’s 500 Index slipped 0.64 percent, while the Nasdaq Composite Index ticked up 0.34 percent. The Dow Jones Industrial Average dropped 1.82 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, slid 1.48 percent.^1,2

Up and Down Week

Stocks fell broadly over the first part of the week. Leading chipmakers who produce semiconductors for artificial intelligence applications were under pressure after Chinese regulators announced an antimonopoly investigation.³

Investors breathed a sigh of relief Wednesday morning following news that consumer inflation in November was in line with expectations. Mega-cap tech stocks led the rally, with the Nasdaq closing above 20,000 for the first time. Meanwhile, the Dow fell as healthcare stocks came under pressure.⁴

Stocks remained in the trading range for the rest of the week on mild concerns about Thursday’s warmer-than-expected wholesale inflation report and a spending slowdown among lower-income consumers. The Dow registered its worst losing streak since 2020.^5,6,7

Final Fed Meeting of 2024

The consumer price index ticked up to 2.7 percent on an annualized basis in November, as expected. The market’s rally following the news reflected investor relief that inflation met expectations and that the increase from the prior month was slight.

Those two factors may reinforce the belief that the Fed would follow through with the December rate adjustment, which it penciled in back in September. The bellwether inflation measure was the last critical data point before the Fed’s two-day meeting, scheduled to end on December 18.⁸

Footnotes and Sources

1. ^{The Wall Street Journal, December 13, 2024}
2. ^{Investing.com, December 13, 2024}
3. ^{CNBC.com, December 10, 2024}
4. ^{The Wall Street Journal, December 11, 2024}
5. ^{The Wall Street Journal, December 12, 2024}
6. ^{CNBC.com, December 13, 2024}
7. ^{The Wall Street Journal, December 13, 2024}
8. ^{The Wall Street Journal, December 11, 2024}

Stocks were mixed during the first trading week of December. Technology stocks led, while the widely followed Dow Jones Industrial Average struggled.

The tech-heavy Nasdaq Composite Index picked up 3.34 percent while the Dow Industrials lost 0.60 percent. The Standard & Poor’s 500 Index added 0.96 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, gained 1.46 percent.^1,2

Tech Takes Charge

The S&P and Nasdaq rallied to start the week, closing at record highs Monday and Tuesday. The Dow fell on both days. During a conference speech, Fed governor Christopher Waller said he supports a rate adjustment in December for now, which seemed to add momentum to the S&P’s and Nasdaq’s gains.^3,4

Tech shares continued to propel stock gains midweek on the strength of a few better-than-expected Q3 reports.⁵

On Friday, the S&P and Nasdaq hit new record highs following the November jobs report. Both notched their third consecutive winning week. By contrast, the Dow was down four of the five trading days, ending the week in the red after two back-to-back weekly gains.^6,7,8

Jobs Rebound

After two hurricanes and an aircraft maker strike weighed on the labor market in October, the November jobs report released Friday gave investors what they were looking for: confirmation that the October update was an anomaly.

While November payrolls topped expectations, investors believed the hotter-than-expected report would not influence the Fed’s upcoming decision regarding short-term interest rates. The Fed’s scheduled two-day meeting ends on December 18.⁹

Footnotes and Sources

1. ^{The Wall Street Journal, December 6, 2024}
2. ^{Investing.com, December 6, 2024}
3. ^{CNBC.com, December 2, 2024}
4. ^{MarketWatch.com, December 3, 2024}
5. ^{CNBC.com, December 4, 2024}
6. ^{MarketWatch.com, December 5, 2024}
7. ^{MarketWatch.com, December 6, 2024}
8. ^{The Wall Street Journal, December 6, 2024}
9. ^{The Wall Street Journal, December 6, 2024}

Stocks posted solid gains over a short and busy holiday week as investors parsed fresh economic data, comments on potential future trade policy, and a few Q3 reports from technology companies.

The Standard & Poor’s 500 Index gained 1.06 percent, while the Nasdaq Composite Index advanced 1.13 percent. The Dow Jones Industrial Average rose 1.39 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, added 2.02 percent.^1,2

Rally Extends

Stocks staged a broad-based rally to start the week as investors reacted to the nominee for Secretary of the Treasury. Small-cap stocks continued their month-to-date surge as the Russell 2000 Index rose to an all-time high. News that consumer confidence rose in November appeared to contribute to gains.^3,4

Then stocks took a pre-Thanksgiving pause as investors digested economic data. Also, disappointing Q3 updates from two computer hardware manufacturers weighed on the tech sector in pre-Thanksgiving trading.⁵

Semiconductor stocks rallied on Friday, pushing all three averages higher for a second straight week. The Dow cracked 45,000 for the first time, and the S&P 500 hit a new record high—with each index closing out its best month of 2024.⁶

Tariff Talk

Some of the post-election rally has been driven by investor expectations for less regulation and lower corporate taxes proposed by the incoming administration. One area of concern has been the economic impact of proposed tariffs.

Some market observers believe that the markets have already priced in the impact of these tariffs. In contrast, others see a new Treasury Secretary as a potential buffer in the tariff talks.⁷

Footnotes and Sources

1. ^{The Wall Street Journal, November 29, 2024}
2. ^{Investing.com, November 29, 2024}
3. ^{The Wall Street Journal, November 25, 2024}
4. ^{CNBC.com, November 26, 2024}
5. ^{The Wall Street Journal, November 27, 2024}
6. ^{The Wall Street Journal, November 29, 2024}
7. ^{CNBC.com, November 26, 2024}

Stocks advanced last week, powering ahead with pre-holiday optimism despite geopolitical tensions and two disappointing Q3 corporate updates.

The Standard & Poor’s 500 Index rose 1.68 percent, while the Nasdaq Composite Index gained 1.73 percent. The Dow Jones Industrial Average led, picking up 1.96 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, was flat (-0.05 percent).^1,2

Stock Push Ahead

Stocks showed mixed results during the first half of the week due to geopolitical tensions that boosted precious metals and put pressure on Treasury yields.³

The Dow Industrials jumped out in front midweek and never looked back. Disappointing earnings on Tuesday from a large box retailer held back some gains in the broader S&P 500. A mixed Q3 update report from the nation’s leading AI chipmaking company also tempered gains a bit.⁴

Year-end optimism, especially around consumers driving a healthy holiday shopping season, supported the rally for much of the week. Fresh data that weekly jobless claims dropped to a seven-month low also lifted spirits.^5,6

Small-Cap Focus

For several weeks, investors have favored small-cap names over larger-cap issues. This trend was again on display last week.

The Russell 2000, an index of 2,000 small-cap companies widely used as a benchmark for U.S. small-cap stocks, rose 4.50 percent for the five days of trading. In the month-to-date through November 22, the Russell is up nearly 9 percent.⁷

Footnotes and Sources

1. ^{The Wall Street Journal, November 22, 2024}
2. ^{Investing.com, November 22, 2024}
3. ^{MarketWatch.com, November 19, 2024}
4. ^{CNBC.com, November 20, 2024}
5. ^{CNBC.com, November 21, 2024}
6. ^{MarketWatch.com, November 21, 2024}
7. ^{The Wall Street Journal, November 22, 2024}

Stocks fell last week as the postelection rally lost momentum amid an inflation uptick and cautious comments from Fed officials.

The Standard & Poor’s 500 Index fell 2.08 percent, while the Nasdaq Composite Index declined 3.15 percent. The Dow Jones Industrial Average lost 1.24 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, dropped by 2.38 percent.^1,2

Rally Fizzles, Data Rattles

Stocks began the week with modest gains as all three major indexes hit record highs. On Tuesday, stocks took a breather with monthly inflation pending.³

News that the Consumer Price Index (CPI) ticked up slightly in October injected some uncertainty into the markets. The Producer Price Index released the following day showed wholesale inflation ticked up last month. While both the CPI and PPI aligned with expectations, investors hoped for better news.

Comments from Fed Chair Powell that the Fed wasn’t “in a hurry” to cut rates were a bit unexpected, which put stocks under more pressure.^4,5

Stocks dropped again on Friday as strong October retail sales seemed to reinforce Powell’s comments about Fed rate adjustments. News that Boston Fed President Susan Collins expressed doubts about what the Fed might do in December, putting further pressure on stocks.⁶

Tug-O-War 

The inflation data that came in last week—retail and wholesale—show that the path to the Fed’s stated goal of 2 percent inflation may prove bumpy.

For the past couple of years, inflation has been the focus of the Fed’s efforts to manage rising prices by tightening the money supply. Ironically, strong retail sales numbers—while a sign of a strong economy—send a mixed message to investors. Confident consumers tend to spend money, which may take some pressure off the Fed as it looks to manage economic activity.

Footnotes and Sources

1. ^{The Wall Street Journal, November 15, 2024}
2. ^{Investing.com, November 15, 2024}
3. ^{CNBC.com, November 12, 2024}
4. ^{The Wall Street Journal, November 13, 2024}
5. ^{The Wall Street Journal, November 14, 2024}
6. ^{CNBC.com, November 15, 2024}