Stocks rallied last week as investors reacted positively to a handful of better-than-expected corporate earnings reports and developments out of Washington, D.C.
The Standard & Poor’s 500 Index gained 1.74 percent, while the Nasdaq Composite Index added 1.65 percent. The Dow Jones Industrial Average rose 2.15 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, added 3.03 percent.1,2
Flurry of News
Markets surged over the first three trading days as investors cheered a flurry of new policy announcements and executive orders following Monday’s inauguration. For example, investors responded to news that the White House trade team is considering taking a softer stance on tariffs.3
It was also a good week for Q4 company reports and other upbeat corporate news.4
Markets leveled off Friday as investors were disappointed that existing home sales fell to a 30-year low. But for the week, the Nasdaq had closed above 20,000 on two of the four trading days, and the S&P 500 closed above 6,000 at every session.5
A Look Forward
The stock market is a discounting mechanism, meaning today’s stock prices reflect all available information, including present and potential future events. And for the most part, the markets reacted positively to the news coming out of Washington last week. Some news spurred broad-based market moves, while other news had more sector-specific impacts.6
For example, on Thursday, markets reacted positively to news that the White House believes interest rates were too high and want to see rates trend lower. The Fed’s first scheduled two-day policy meeting ends on Wednesday, so investors may be looking to see if Fed Chair Jerome Powell addresses the new administration’s concerns.
Footnotes and Sources
- The Wall Street Journal, January 24, 2025
- Investing.com, January 24, 2025
- MarketWatch.com, January 21, 2025
- CNBC.com, January 22, 2025
- CNBC.com, January 24, 2025
- The Wall Street Journal, January 21, 2025
