Stock Market Update: S&P 500 Sets New Record High Amidst Inflation Data and Earnings Season
The S&P 500 (^GSPC) reached a record high last week, buoyed by positive inflation news that eased concerns over Federal Reserve rate hikes. The Nasdaq Composite (^IXIC) gained 2.5%, while the S&P 500 rose 1.5%. The Dow Jones Industrial Average (^DJI) advanced 0.5%.
Corporate Earnings Season
Corporations including Alibaba (BABA) and Walmart (WMT) will release quarterly results this week, with 46 S&P 500 companies expected to announce earnings during the holiday-shortened trading week.
Economic Calendar
The upcoming week will see a light flow of economic news. Key events include:
* Wednesday: FOMC meeting minutes from January
* Wednesday: Housing starts and building permits for January
* Thursday: Initial jobless claims and Philadelphia Fed business outlook
Markets will be closed on Monday for Presidents' Day.
Inflation Dynamics
Recent inflation data showed higher-than-expected price increases, but economists have identified positive signs for markets and the Fed. Calculations suggest that core PCE inflation, excluding food and energy, may have slowed in January. This could lead to one or two interest rate cuts from the Fed in 2025, according to Bloomberg data. Economists believe the Fed is more likely to cut rates than raise them.
Broad Market Strength
The S&P 500 is nearing its record high without the dominance of a few tech giants. While Meta (META) has surged, only it and Amazon (AMZN) have outperformed the index among the "Magnificent Seven" tech stocks. As of Wednesday, 48% of the S&P 500 companies surpassed the index's 4% gain, indicating broad market participation.
AI Boom
AI-related stocks continue to perform strongly, with Palantir (PLTR) and Super Micro Computer (SMCI) leading the S&P 500 in 2025. Nvidia's recent equity adjustments have sparked investor rotation within the AI sector.