Global Equities Surge, Optimism Buoys Markets Despite Economic Concerns
NEW YORK, Jan. 26, 2025 - The global stock market is poised for its strongest start to a presidential term since Ronald Reagan, as major indices hover near record highs.
Key Market Movements
* S&P 500: Little change
* Nasdaq 100: -0.2%
* Dow Jones Industrial Average: -0.1%
* Bloomberg Magnificent Seven Total Return Index: Little change
* Russell 2000 Index: +0.3%
Factors Driving Market Sentiment
* Positive remarks from President Donald Trump regarding economic policies and tax reductions.
* Reduced concern over tariffs on China, despite ongoing threats from Trump.
* Expected Treasury volatility at its lowest since mid-December.
Corporate Highlights
* Meta Platforms Inc. (META) announces plans to invest significantly in artificial intelligence projects.
* Cryptocurrency-related firms surge following Trump's executive order supporting the industry.
* Withdrawal of proposed ban on menthol cigarettes and flavored cigars boosts tobacco stocks.
Economic Data
* US consumer sentiment declines for the first time in six months.
* Consumers anticipate an inflation rate of 3.2% over the next five to ten years, and 3.3% over the next year, reaching its highest level since May 2023.
Federal Reserve Outlook
* Fed policymakers expected to keep interest rates unchanged next week.
* Rate swaps indicate two quarter-point reductions by year-end, up from one last week.
Outlook
* Economists remain optimistic despite potential volatility due to AI investment spending, tariffs, and interest rates.
* Focus on cautious optimism among retail investors, with a majority expecting continued market growth in 2025.
* Fears of inflation persist, but long-term expectations remain anchored.
* Slowing quarterly sales expected for some Magnificent Seven companies due to consumer sentiment and a stronger dollar.
* Earnings season begins next week, with investors closely monitoring corporate performance.