S&P 500 Rallies After Trump's First Week, Faces Fed Decision and Tech Earnings
The S&P 500 (^GSPC) has capped its best performance in the first four trading days under a new president since Ronald Reagan's first week in 1985. The coming week will test this rally with a barrage of news.
Earnings Season in Focus
Over 100 S&P 500 companies will report earnings, including tech heavyweights Meta (META), Microsoft (MSFT), Apple (AAPL), and Tesla (TSLA). Wednesday will be the busiest day for earnings releases. Other notable companies reporting include Starbucks (SBUX), Exxon (XOM), and Chevron (CVX).
Fed Decision on Wednesday
The Federal Reserve will announce its latest monetary policy decision on Wednesday afternoon. The central bank is expected to keep interest rates unchanged, but investors will be attentive to Fed Chair Jay Powell's remarks on the economic outlook for 2025.
Impact of Trump's Policies
President Trump's initial actions have influenced market movements. The dollar's decline on Tuesday, following Trump's lack of action on tariffs, led to a rally in the stock market. Trump's announcement of a $500 billion AI investment on Wednesday further boosted the tech sector.
Economic Health Check
Several key economic readings will be released throughout the week. The first estimate of fourth-quarter GDP is expected to show a 2.6% annualized growth rate. The Personal Consumption Expenditures (PCE) index, the Fed's preferred inflation gauge, is anticipated to remain at 2.8% in December.
Big Tech Earnings
Earnings season will provide insights into the health of the technology sector. The "Magnificent Seven" tech stocks, including Meta, Microsoft, Apple, and Tesla, are expected to drive earnings growth. However, analysts believe the earnings gap between large-cap tech and other sectors will narrow in 2025.
Weekly Calendar
Monday:
* Economic data: Chicago Fed National Activity Index, December; New home sales, December
* Earnings: AT&T (T), Nucor (NUE), SoFi (SOFI), Western Alliance Bancorporation (WAL)
Tuesday:
* Economic data: Durable goods orders, December; FHFA house price index, November; S&P CoreLogic Case-Shiller home prices, November; Conference Board Consumer Confidence, January; Richmond Fed manufacturing index, January
* Earnings: Boeing (BA), General Motors (GM), JetBlue (JBLU), Lockheed Martin (LMT), Logitech (LOGI), Royal Caribbean Cruises (RCL), SAP (SAP), Starbucks (SBUX), Sysco (SYY)
Wednesday:
* Economic data: MBA Mortgage Applications
* FOMC rate decision
* Earnings: Tesla (TSLA), Meta (META), Microsoft (MSFT), ADP (ADP), ASML (ASML), General Dynamics (GD), IBM (IBM), Nasdaq (NDAQ), Progressive (PGR), ServiceNow (NOW), T-Mobile (TMUS), V.F. Corporation (VFC)
Thursday:
* Economic data: Fourth quarter GDP, first estimate; Personal consumption, advance estimate; Core PCE, advance estimate; Initial jobless claims
* Earnings: Apple (AAPL), Blackstone (BX), Caterpillar (CAT), Comcast (CMCSA), Dow (DOW), Deckers Outdoors (DECK), Intel (INTC), Mastercard (MA), Mobileye (MBLY), Southwest Airlines (LUV), UPS (UPS), United States Steel (X), Visa (V)
Friday:
* Economic data: Core PCE index, December; Employment cost index, fourth quarter
* Earnings: Charter Communications (CHTR), Chevron (CVX), Colgate (CL), Exxon Mobil (XOM), Phillips 66 (PSX)