The Stock Market's Path in 2025
Market Update
The S&P 500 (^GSPC) posted its best weekly performance since the November election, buoyed by lower-than-anticipated inflation data. The index surged over 3%, while the Nasdaq Composite (^IXIC) gained more than 2.6%. The Dow Jones Industrial Average (^DJI) led the charge, climbing nearly 4%.
Market Outlook
Markets will be closed for the Martin Luther King Jr. holiday on Monday, diverting attention to President Donald Trump's inauguration. Investors will scrutinize his tariff and tax policies, anticipating their impact on American corporations.
A light economic calendar awaits investors, with updates on the services and manufacturing sectors, as well as consumer sentiment.
Earnings Season
43 S&P 500 companies are slated to report quarterly results this week, including Netflix (NFLX), United Airlines (UAL), Johnson & Johnson (JNJ), and 3M Company (MMM).
Trump's Second Term
Trump's inauguration on Monday marks the beginning of his second term. Many investors expect him to remain sensitive to fluctuations in stock prices.
Rallies in sectors associated with Trump, such as small caps, energy, and financials, have been sporadic. Market volatility is anticipated ahead of the inauguration.
Federal Reserve Debate
While a weaker-than-expected inflation report eased concerns about interest rate hikes, a hotter-than-expected December jobs report prompted some to question whether rate increases would be reconsidered.
The Fed's next policy decision is scheduled for Jan. 29, during which it enters its "blackout period," prohibiting officials from public statements.
Earnings Competition
Earnings season is underway, with early results exceeding expectations. S&P 500 earnings growth projections have risen to 12.5% year-over-year.
However, political headlines surrounding Trump's inauguration may overshadow earnings news.
Economic Data and Events
* Monday: Markets closed for Martin Luther King Jr. Day
* Tuesday: No notable economic data releases
* Wednesday: MBA Mortgage Applications, Leading Index
* Thursday: Initial jobless claims, Kansas City Fed. Manufacturing Activity
* Friday: S&P Global US manufacturing PMI, S&P Global Services PMI, Existing home sales, University of Michigan consumer sentiment