Weekly Wrap

The stock market endured a choppy and ultimately modestly negative week, as early record highs in the S&P 500 gave way to a broad pullback driven by profit-taking in mega-cap stocks and a lack of follow-through catalysts. The S&P 500 finished the week down 0.4%, the DJIA fell 0.3%, and the Nasdaq Composite declined 0.7%. While the major averages struggled to hold gains, the underlying tone of the market continued to improve, with leadership broadening meaningfully and small- and mid-cap stocks once again outperforming.

The S&P 500 briefly pushed to fresh record highs early in the week before retreating into negative territory, while the Nasdaq Composite lagged amid sustained pressure on mega-cap technology and growth names. In contrast, the S&P 500 Equal Weight Index gained 1.3%, underscoring a rotation away from index-heavy leadership and toward a wider swath of cyclical and value-oriented stocks. That dynamic was reinforced by another strong week for smaller-cap stocks, with the Russell 2000 up 2.0% and the S&P Mid Cap 400 higher by 1.3%, both of which significantly outpaced large-cap benchmarks.

Mega-cap stocks were a persistent headwind throughout the week, as investors trimmed exposure following an extended run and reassessed positioning amid sticky inflation data and a still-distant outlook for Fed easing. The Vanguard Mega Cap Growth ETF fell 1.5% on the week, reflecting weakness in several of the market’s largest names despite pockets of resilience in select AI leaders.

Semiconductor stocks stood out as a notable exception to the broader weakness in technology. Strong earnings and upbeat capital spending guidance from Taiwan Semiconductor Manufacturing kept chipmakers firmly bid, allowing the PHLX Semiconductor Index to climb 3.8% for the week even as the information technology sector declined 0.7%.

At the sector level, defensive and cyclical areas showed relative strength. Real estate (+4.1%), consumer staples (+3.7%), industrials (+3.0%), energy (+2.4%), and utilities (+2.1%) finished the week higher, helping offset notable weakness in consumer discretionary (-2.0%), financials (-2.3%), communication services (-1.5%), and health care (-1.1%).

The week’s economic data did little to alter the macro outlook. CPI and PPI readings came in largely in line with expectations but failed to deliver a downside inflation surprise, reinforcing the view that the Federal Reserve may remain on hold for several more months. Meanwhile, retail sales and manufacturing data pointed to a still-resilient economy, supporting continued strength in cyclical areas of the market.

Earnings season also got underway, with big banks delivering mixed results. While some early reports disappointed, later earnings from major financial institutions helped stabilize the financials sector and underscored generally healthy credit conditions despite policy uncertainty surrounding proposed credit card rate caps.

Overall, this was a week defined less by index-level performance and more by internal rotation. Leadership continued to broaden, small- and mid-cap stocks remained in favor, and cyclical sectors attracted steady inflows. As the market heads into the coming week, investors will be watching whether earnings momentum and upcoming economic data can reaccelerate upside participation at the index level or further entrench the ongoing rotation beneath the surface.

• Russell 2000: +2.0%
• S&P Mid Cap 400: +1.3%
• DJIA: -0.3%
• S&P 500: -0.4%
• Nasdaq Composite: -0.7%

Monday: 

The S&P 500 (+0.2%), Nasdaq Composite (+0.3%), and DJIA (+0.2%) notched modest gains today as stocks mounted a broad reversal from early losses. Today's gains culminated in fresh record highs for the S&P 500, while the DJIA notched a record close. 

The stock market opened to relatively broad losses this morning as investors navigated a handful of negative news items. Most notably, Fed Chair Jerome Powell confirmed that he is the subject of a Department of Justice criminal probe tied to his testimony before the Senate Banking Committee concerning renovations to Fed headquarters. The headline raised concerns about the Federal Reserve's political independence, although the market has grown familiar with this narrative in recent years.

While the broader market saw the development as an excuse to take some profits following Friday's record highs, the market quickly began to regain its footing, and by midday, the major averages were mostly higher. 

The financials sector (-0.8%) was one of very few S&P 500 sectors that remained firmly lower, facing additional pressure from a separate premarket development. President Trump's call to cap credit card interest rates at 10% caused a sharp drop in many credit card and banking names. Synchrony Financial (SYF 79.63, -7.26, -8.36%) and Capital One (COF 233.20, -16.00, -6.42%) were the worst-performing S&P 500 names today, while American Express (AXP 359.59, -16.02, -4.27%) and Citigroup (C 117.70, -3.62, -2.98%) also faced notable retreats. 

JPMorgan Chase (JPM 324.49, -4.70, -1.43%) also traded lower ahead of its earnings release tomorrow, the first of a busy week for major banking names. 

The energy sector (-0.7%) was the only other laggard today despite crude oil futures settling today's session $0.45 higher (+0.8%) at $59.55 per barrel. Exxon Mobil (XOM 123.98, -0.62, -0.50%) CEO Darren Woods said that Venezuela is "uninvestable" in its current state, a comment that drew the ire of President Trump, prompting him to say he might keep Exxon out of the country himself.

Meanwhile, the nine other S&P 500 sectors finished at or above their baselines. 

Though the information technology sector (+0.4%) finished with only about half of its gain from session highs, its steady rise from an opening loss was pivotal in lifting the major averages decidedly above their baselines.

Memory storage names Western Digital (WDC 212.18, +11.72, +5.85%) and Seagate Tech (STX 321.48, +17.47, +5.75%) posted another day of impressive gains, leaving the two stocks up 23.1% and 16.7% for the year, respectively. 

The PHLX Semiconductor Index (+0.5%) advanced nicely, though NVIDIA (NVDA 184.89, +0.03, +0.02%) once again ceded a solid intraday gain.

Elsewhere, the consumer staples sector (+1.4%) captured the widest gain, a lead that it held from early in the session.  Walmart (WMT 117.97, +3.44, +3.00%) provided solid leadership after news that it will join the Nasdaq 100 Index, with Costco (COST 943.08, +18.20, +1.97%) also trading higher. 

Dollar General (DG 148.86, +6.12, +4.29%) and Dollar Tree (DLTR 137.24, +4.86, +3.67%) both rebounded from Friday's pullback, which followed investor disappointment after the Supreme Court declined to issue a ruling on the legality of President Trump's IEEPA tariffs. 

The materials sector (+0.7%) was another top mover as concerns around Fed independence drove gold to fresh record highs, with the metal settling today's session $114.30 higher (+2.5%) at $4,615.30 per troy ounce. As is often the case when precious metals rally, Freeport-McMoRan (FCX 58.70, +2.17, +3.84%) and Newmont Corporation (NEM 112.92, +3.93, +3.61%) posted solid gains. 

Elsewhere, the industrial sector (+0.8%) rounds out the top three movers today with strong showings from defense names sending the iShares Aerospace and Defense ETF 1.5% higher amid continued geopolitical uncertainty.  The Wall Street Journal reported that President Trump is considering an Iranian offer for diplomacy, but he is leaning towards approving new military strikes on the country and will meet with advisors tomorrow. 

Outside of the S&P 500, the Russell 2000 (+0.4%) and S&P Mid Cap 400 (+0.2%) added to their year-to-date gains that see them outperform the major averages early in the year. 

Though today's gains across the major averages were modest, the reversal from opening lows reflects resilience in a market that continues to chart record highs in broad fashion. Stocks were able to shake the early weakness tied to concerns of Fed independence and put together another winning session. Attention now turns to tomorrow's 8:30 a.m. ET release of the December CPI (Briefing.com consensus 0.3%) and Core CPI (Briefing.com consensus 0.3%) readings, which will be a key near-term catalyst for markets. A hotter print could push rate-cut expectations further out from their current several-month horizon, while a softer reading would likely support the market's push to new highs.

U.S. Treasuries began the week with losses across the curve, but an intraday resilient showing helped the complex finish above morning lows. The U.S. Treasury sold $58 billion in 3-year notes and $39 billion in 10-year notes, both of which were met with good demand. The 2-year note yield settled up one basis point to 3.55%, and the 10-year note yield settled up two basis points to 4.19%. 

There was no economic data of note today. 

Tuesday: 

The S&P 500 (-0.2%), Nasdaq Composite (-0.1%), and DJIA (-0.8%) drifted modestly lower from yesterday's record highs after a busy morning of economic data and earnings reports failed to provide a strong enough catalyst for further growth. 

Investors eagerly awaited this morning's December CPI (0.3%; Briefing.com consensus: 0.3%) and Core CPI (0.2%; Briefing.com consensus: 0.3%) readings. While the initial reaction to the data gave equity futures a modest lift, with the core figure coming in slightly better than expected, the data did not change the market's expectations for Fed easing in 2026 and failed to materialize into a catalyst throughout the session. Expectations for the next rate cut remain pushed out to June, according to the CME FedWatch Tool.

In other pre-market developments, JPMorgan Chase (JPM 310.78, -13.71, -4.23%) posted a mixed earnings report, in which the company missed on GAAP EPS, although adjusted EPS came in better than expected, while also missing revenue expectations. The report set up a tough session for other banking names such as Citigroup (C 116.28, -1.42, -1.21%), Wells Fargo (WFC 93.48, -1.48, -1.56%), and Bank of America (BAC 54.48, -0.71, -1.29%), which report earnings tomorrow before the open.  

Additionally, the financials sector (-1.8%) faced a continuation of yesterday's pressure in credit card names such as Visa (V 328.05, -15.15, -4.41%) and Mastercard (MA 544.79, -21.49, -3.79%) after President Trump called for a one-year 10% interest rate cap on credit cards. 

The consumer discretionary sector (-0.5%) closed with the next widest loss, as weak leadership from Amazon (AMZN 242.60, -3.87, -1.57%) and Tesla (TSLA 447.09, -1.87, -0.42%) masked gains in over half of the sector's components. 

The mega-caps saw some bumpy action today but finished mostly lower, with the Vanguard Mega Cap Growth ETF (-0.4%) finishing a touch off of session lows despite briefly entering positive territory around midday. 

Microsoft (MSFT 470.67, -6.51, -1.36%) was another mega-cap laggard, which contributed to weakness in the top-weighted information technology sector (-0.1%). The sector also had a midday stint in positive territory amid another strong day for chipmakers, which briefly pushed the major averages above their flatlines. The PHLX Semiconductor Index (+1.0%) finished with a respectable gain, though well off of session highs. Advanced Micro Devices (AMD 220.97, +13.28, +6.39%) and Intel (INTC 47.29, +3.23, +7.33%) outperformed after KeyBanc Capital Markets upgraded both stocks to Overweight from Sector Weight.

Elsewhere, the health care sector (-0.4%) saw a continuation of yesterday's weakness despite Moderna (MRNA 39.60, +5.76, +17.02%) finishing as the top-performing S&P 500 name after CEO Stephane Bancel said the company projects 2025 sales to come in above the midpoint of early guidance. 

Meanwhile, the other defensive sectors, the consumer staples (+1.1%) and utilities (+0.6%) sectors, notched solid gains amid the mega-cap weakness. Walmart (WMT 120.36, +2.39, +2.03%) posted another day of solid leadership for the consumer staples sector, widening its week-to-date gain to 5.1%.

The energy sector (+1.5%) finished with the widest gain, supported by crude oil futures settling today's session $1.62 higher (+2.7%) at $61.17 per barrel. The rising price of oil is largely attributed to geopolitical tensions in Iran, with President Trump announcing via Truth Social that he has cancelled all meetings with Iranian officials while urging protesters to "take over your institutions."  The New York Times also reports that the president was presented with options to attack the country. 

The industrials sector (+0.5%) also finished higher despite a post-earnings retreat from Delta Air Lines (DAL 69.34, -1.69, -2.38%), while the real estate (+0.8%), materials (+0.3%), and communication services (+0.1%) sectors round out the seven advancing S&P 500 sectors.

Outside of the S&P 500, the Russell 2000 (-0.1%) finished with a slight loss, while the S&P Mid Cap 400 (+0.2%) outperformed. 

Ultimately stocks took a slight step back today as this morning's developments failed to deliver upside surprises.  Tomorrow's session carries many of the same potential catalysts, as investors brace for the November PPI report (Briefing.com consensus 0.2%) and additional earnings from major banks.

U.S. Treasuries finished Tuesday with gains across the curve with some assistance from today's $22 billion 30-year bond reopening, which made for a strong finish to this week's good note and bond auction slate. The 2-year note yield settled down two basis points to 3.53%, and the 10-year note yield settled down two basis points to 4.17%. 

Reviewing today's data:

• December NFIB Small Business Optimism 99.5; Prior 99.0
• December CPI 0.3% (Briefing.com consensus 0.3%); Prior 0.2%, December Core CPI 0.2% (Briefing.com consensus 0.3%); Prior 0.2%
  • The key takeaway from the report is that core CPI was a touch cooler than expected, which prevented the year-over-year rate from rising. While this is a small victory, it is a welcome sight for a market that hopes to see some more future disinflation that would encourage the Fed to keep cutting rates.
• October New Home Sales 737K; Prior 738K
  • The key takeaway from the report is that the South region—the nation's largest housing sector—was the sole source of strength in October. Home sales declined in all other regions, with higher home prices, on average, acting as a headwind.
• September New Home Sales 738K (Briefing.com consensus 710K); Prior was revised to 711K from 800K
• December Treasury Budget -$145 bln vs. -$233.0 bln Briefing.com consensus; prior -$173.0 bln

Wednesday:

The S&P 500 (-0.5%), Nasdaq Composite (-1.0%), and DJIA (-0.1%) retreated amid a notable rotation out of mega-cap tech today. While the major averages finished well off of their session lows, today's losses pushed the indices into negative week-to-date territory. 

This morning's inflation data added to the "risk off" sentiment in the market today. 

The November PPI (0.2%; Briefing.com consensus: 0.2%) and Core PPI (0.0%; Briefing.com consensus: 0.2%) reports showed both measures rising on a year-over-year basis to 3.0% from 2.8% and 2.9%, respectively, further reinforcing the market's view that several more months may pass before the next potential rate cut. The data follows yesterday's December CPI release, in which both the headline figure (0.3%; Briefing.com consensus: 0.3%) and core CPI (0.2%; Briefing.com consensus: 0.3%) came in largely in line with expectations.

While neither report materially shifted the policy outlook, the lack of a downside inflation surprise, combined with equity prices sitting at record highs, has contributed to another pullback in stocks today, one that has proven sharper than recent bouts of weakness.

Despite a November Retail Sales report (0.6%; Briefing.com consensus: 0.4%) that topped expectations, the consumer discretionary sector (-1.8%) finished with the widest loss today. Amazon (AMZN 236.65, -5.95, -2.45%) and Tesla (TSLA 439.14, -8.06, -1.80%) provided weak mega-cap leadership, while lululemon athletica (LULU 203.14, -8.76, -4.13%) was a considerable laggard after the U.S. Supreme Court did not issue a ruling on the legality of President Trump's IEEPA tariffs today. 

The top-weighted information technology sector (-1.5%) closed with a similar loss. NVIDIA (NVDA 183.14, -2.67, -1.44%) and Microsoft (MSFT 459.38, -11.29, -2.40%) were among the mega-cap names that traded lower, while Intuit (INTU 566.60, -38.68, -6.39%) and AppLovin (APP 617.76, -50.86, -7.61%) finished with the widest losses across S&P 500 names today. 

The Vanguard Mega Cap Growth ETF would finish with a 1.3% loss, which was actually a solid improvement from session lows. Outside of the mega-cap realm, the market had a positive tilt, which helped the S&P 500 Equal Weighted Index (+0.4%) decidedly outperform the market-weighted S&P 500 (-0.5%). 

Though the financials sector (-0.2%) failed to notch a gain, the modesty of its loss is impressive considering the scope of losses in several major banking names today.  Wells Fargo (WFC 89.26, -4.30, -4.60%) was a notable laggard after missing revenue expectations, while Bank of America (BAC 52.52, -2.02, -3.71%) and Citigroup (C 112.41, -3.89, -3.34%) also moved lower despite topping estimates. 

Credit card names such as Capital One (COF 234.42, +3.00, +1.30%) and Visa (V 329.22, +1.34, +0.41%) saw modest gains after two consecutive sessions of weakness that followed President Trump's call for a one-year 10% cap on credit card interest rates. 

The energy sector (+2.3%) closed with the widest gain, supported by crude oil futures setting today's session $0.71 higher (+1.2%) at $61.88 per barrel. However, since the settlement closing, oil has given back today's gain and then some after President Trump said at a White House event that he has been told Iran is stopping the execution of protestors. 

Elsewhere, the consumer staples (+1.2%), consumer staples (+0.7%), and health care (+0.7%) sectors traded higher as investors sought more defensive positionings amid the mega-cap sell-off today.  The real estate sector (+1.1%) also captured a solid gain. 

Outside of the S&P 500, the Russell 2000 (+0.7%) captured another solid gain, with the S&P Mid Cap 400 (+0.1%) also finishing higher as the smaller-cap indices continue to outperform the major averages this year. 

Overall, today's session reflected the broadening of leadership that has been prevalent so far this year, though a notable trimming of mega-cap holdings pressured the major averages despite strength elsewhere. 

U.S. Treasuries enjoyed a midweek extension of their gains from Tuesday, sending yields on most tenors to one-week lows while the 30-year yield settled at its lowest level since early December. The 2-year note yield settled down two basis points to 3.51%, the 10-year note yield settled down three basis points to 4.14%, and the 30-year note yield settled down three basis points to 4.80%. 

Reviewing today's data:

• Weekly MBA Mortgage Applications Index 28.5%; Prior -9.7%
• November Retail Sales 0.6% (Briefing.com consensus 0.4%); Prior was revised to -0.1% from 0.0%, November Retail Sales, ex-auto 0.5% (Briefing.com consensus 0.3%); Prior was revised to 0.2% from 0.4%
  • The key takeaway from the report is that retail sales rebounded smartly in November after the end of the government shutdown, driven by increases across most discretionary spending categories.
• November PPI 0.2% (Briefing.com consensus 0.2%); Prior was revised to 0.1% from 0.3%, November Core PPI 0.0% (Briefing.com consensus 0.2%); Prior was revised to 0.3% from 0.1%
  • The key takeaway from the report is that PPI and core-PPI both increased on a year-over-year basis to 3.0% from 2.8% and 2.9%, respectively, which is to say they moved in the wrong direction to create a true sense of inflation calm and a seeming rate-cut guarantee.
• Q3 Current Account Balance -$226.4 bln; Prior was revised to -$249.2 bln from -$251.3 bln
• December Existing Home Sales 4.35 mln (Briefing.com consensus 4.15 mln); Prior was revised to 4.14 mln from 4.13 mln
  • The key takeaway from the report is that home sales in December increased across all regions, leading to the strongest increase in seasonally adjusted sales in nearly three years despite tight inventory levels.
• October Business Inventories 0.3%; Prior was revised to 0.3% from 0.2%
• The Fed's January Beige Book described overall economic activity as having increased at a slight to modest pace in eight Districts while three Districts saw no change and one reported a modest decline. Consumer spending increased during the holiday shopping season with higher-income consumers fueling the growth while remaining groups became more price sensitive. Auto sales were little changed while manufacturing was mixed. Residential real estate activity softened while employment was little changed.

Thursday: 

The stock market had an eventful session today that saw the S&P 500 (+0.3%) and Nasdaq Composite (+0.3%) finish significantly below their session highs as mega-cap tech faced considerable afternoon profit taking. Broad strength helped the DJIA (+0.6%) finish closer to its own session high, though most pockets of the market closed off of their best levels. 

Despite facing a considerable pullback of their own, semiconductor names were still one of the day's biggest winners. An impressive earnings report from Taiwan Semiconductor Manufacturing (TSM 341.64, +14.53, +4.44%) precipitated the sharp early gains across chipmakers and other AI plays. Notably, the company expects between $52 billion and $56 billion in capital spending in 2026, which provided a boost to the AI trade today. 

The PHLX Semiconductor Index (+1.8%) traded as much as 3.9% higher, though it found itself in the crosshairs of some selling activity this afternoon. The broader information technology sector (+0.5%) shed the bulk of its early gain after trading over 1.5% higher today. 

The pullback did somewhat coincide with comments from Commerce Secretary Howard Lutnick, who said in a CNBC interview that semiconductor companies without production in the U.S. will likely face a 100% tariff rate. However, the space was likely due for some profit-taking after a hot start to 2026 that had the PHLX Semiconductor Index up over 12% for the year. 

KLA Corporation (KLAC 1544.96, +110.46, +7.70%) still managed to capture the widest gain across S&P 500 names today, supported by Wells Fargo upgrading the stock to Overweight from Equal Weight with a $1600 target, while Morgan Stanley upgraded shares to Overweight from Equal Weight with a $1697 target.

Additionally, NVIDIA (NVDA 186.99, +3.85, +2.10%) remained a mega-cap standout despite a tough afternoon for the market's largest names. The Vanguard Mega Cap Growth ETF (+0.1%) finished flattish after moving as much as 0.7% higher. 

Mega-cap weakness saw the consumer discretionary sector (+0.4%) finish with about half of its previous gain, while a retreat in Alphabet (GOOG 333.16, -3.15, -0.94%) sent the communication services sector (-0.4%) lower. 

Seven total S&P 500 sectors closed with gains, with the defensive utilities sector (+1.0%) capturing the widest gain as it was largely resilient to the afternoon sell-off. 

Cyclical sectors finished mostly higher, with the industrials sector (+0.9%) finishing near the top of the leaderboard. Airline names such as Delta Air Lines (DAL 71.34, +2.85, +4.16%) and United Airlines (UAL 116.02, +5.27, +4.76%) outperformed today as they rebounded from previous losses this week that followed Delta's earnings release on Monday. 

The financials sector (+0.4%) also closed with a gain, though it was one of many sectors to finish well off of its best levels.  Morgan Stanley (MS 191.29, +10.51, +5.81%), Goldman Sachs (GS 975.88, +43.21, +4.63%), and BlackRock (BLK 1156.90, +65.05, +5.96%) all finished sharply higher after topping earnings estimates this morning, providing the financials sector with some reprieve after what has been a tough week. 

Meanwhile, the energy sector (-0.9%) closed with the widest loss as oil prices continued to fall sharply in response to a de-escalation of tensions between the U.S. and Iran that makes a U.S. strike seem unlikely for the time being.  Crude oil futures settled today's session $2.79 lower (-4.5%) at $59.09 per barrel. 

The health care sector (-0.6%) was another laggard, though its weakness was exacerbated by a few stock-specific developments. Eli Lilly (LLY 1032.72, -40.58, -3.78%) provided weak leadership after Reuters reported the FDA has delayed its approval decision of the company's weight loss pill to April 10. Boston Scientific (BSX 90.00, -3.74, -3.99%) was another laggard following the announcement of its agreement to acquire Penumbra (PEN 350.42, +37.00, +11.80%) in a deal valued at approximately $14.5 billion.

Outside of the S&P 500, the Russell 2000 (+0.9%) and S&P Mid Cap 400 (+1.2%) also ceded some of their early strength, though they were much more resilient to the pullback and once again decidedly outperformed the larger-cap major averages. 

The trend of broadening leadership continues to pervade the market as mega-cap stocks struggle in 2026. The Vanguard Mega Cap Growth ETF is down 0.9% year-to-date, while the Russell 2000 (+7.8% year-to-date) and S&P Mid Cap 400 (+6.4% year-to-date) have surged. This dynamic is also evident in the widening performance gap between the market-cap-weighted S&P 500 (+1.5% year-to-date) and the S&P 500 Equal Weight Index (+4.2% year-to-date), as cyclical sectors continue to post solid gains on expectations for a strong economy in 2026, even with recent Fed commentary pointing to several months before the next potential rate cut. 

U.S. Treasuries had a mixed showing on Thursday, with relative weakness in the front end lifting the 2-year yield to its highest settlement since early December while the long bond outperformed, recording its third consecutive gain. The 2-year note yield settled up five basis points to 3.56%, the 10-year note yield settled up two basis points to 4.16%, and the 30-year note yield settled down one basis point to 4.79%. 

• Russell 2000: +7.8% YTD
• S&P Mid Cap 400: +6.4% YTD
• DJIA: +2.9% YTD
• S&P 500: +1.5% YTD
• Nasdaq Composite: +1.2% YTD

Reviewing today's data:

• Weekly Initial Claims 198K (Briefing.com consensus 210K); Prior was revised to 207K from 208K, Weekly Continuing Claims 1.884 mln; Prior was revised to 1.903 mln from 1.914 mln
  • The key takeaway from the report is that it corroborates a low firing-low hiring environment that will keep the Fed on watch but also on hold in terms of a rate cut this month and possibly until June, which is when the fed funds futures market is projecting the first cut in 2026.
• January Philadelphia Fed Index 12.6 (Briefing.com consensus -5.0); Prior was revised to -8.8 from -10.2
• November Import Prices 0.4%; Prior 0.1%
• November Import Prices ex-oil 0.6%; Prior 0.1%
• November Export Priices 0.5%; Prior 0.0%
• November Export Prices ex-ag. 0.4%; Prior 0.0%
• January Empire State Manufacturing 7.7 (Briefing.com consensus 1.0); Prior was revised to -3.7 from -3.9

Friday:

The stock market ended the week on an underwhelming note, with the S&P 500 (-0.1%), Nasdaq Composite (-0.1%), and DJIA (-0.2%) unable to notch the gains necessary to finish the week in positive territory. 

The broader market was mixed today, and without any outsized moves at the sector level. The real estate sector (+1.2%), which captured the widest gain this week (+4.1%) was the only sector to close with a gain or loss of 1.0% or wider. 

Early in the session the top-weighted information technology sector (+0.1%) held a similar gain, though similar to yesterday's action it was unable to sustain the early growth. Chipmaker names had another strong session, sending the PHLX Semiconductor Index 1.3% higher, with Micron (MU 362.75, +26.12, +7.76%) among the outperformers after a company director purchased more than $7.8 billion in stock. The company also broke ground on a new production facility today. 

However, strength in chipmakers was largely offset by weakness in software names, with losses across the iShares GS Software ETF (-1.5%) sending it to its lowest levels since early May.

The industrials sector (+0.7%) was able to maintain the bulk of its earlier gain, with particular strength in power names such as GE Vernova (GEV 681.55, +39.32, +6.12%) following President Trump's call for the development of more power plants. 

The financials sector (+0.1%) finished just modestly higher despite a solid earnings report from PNC (PNC 223.18, +8.14, +3.79%) and a rebound in credit card names such as Synchrony Financial (SYF 80.19, +2.49, +3.20%) and American Express (AXP 364.79, +7.42, +2.08%).

Meanwhile, the health care sector (-0.8%) was the biggest laggard amid a relatively slow session for defensive sectors. Though not a component of the sector, Novo Nordisk A/S (NVO 62.34, +5.22, +9.14%) finished sharply higher amid solid demand for its recently launched weight loss pill. 

The communication services sector (-0.7%) was also near the bottom of the leaderboard, as Alphabet (GOOG 330.34, -2.82, -0.85%) was a mega-cap laggard for the second consecutive session. The Vanguard Mega Cap Growth ETF (-0.2%) finished modestly lower to end a tough week for the market's largest names that saw the ETF shed 1.5%. 

Outside of the S&P 500, the Russell 2000 (+0.1%) managed to scratch out a gain, while the S&P Mid Cap 400 (-0.3%) moved lower. 

Ultimately, a lack of fresh catalysts and mixed sector performance kept trading subdued, setting the stage for next week's data and earnings flow to determine whether momentum can reaccelerate.

On the policy front, Fed Vice Chair for Supervision Bowman (FOMC voter) pushed back against recent pause-friendly rhetoric, saying the Fed should remain ready to adjust policy toward neutral and avoid signaling a pause absent changing conditions. Despite the contrast with other FOMC members, markets made no change to their expected easing timeline.

What has shifted is the outlook for Fed leadership. CNBC reported that President Trump signaled he wants National Economic Council Director Mr. Hassett to remain in his current role, boosting prediction-market odds that former Fed Governor Mr. Warsh is now the leading contender to be the next Fed Chair.

U.S. Treasuries finished the week on a lower note, sending yields on 5s and 10s to their highest levels since late August/early September. The 2-year note yield settled up four basis points to 3.60% (+6 basis points this week), and the 10-year note yield settled up seven basis points to 4.23% (+6 basis points this week). Bond and equity markets will be closed on Monday for Martin Luther King Jr. Day.

• Russell 2000: +8.0% YTD
• S&P Mid Cap 400: +6.1% YTD
• DJIA: +2.7% YTD
• S&P 500: +1.4% YTD
• Nasdaq Composite: +1.2% YTD

Reviewing today's data:

• December Industrial Production 0.4% (Briefing.com consensus 0.2%); Prior was revised to 0.4% from 0.2%, December Capacity Utilization 76.3% (Briefing.com consensus 76.0%); Prior was revised to 76.1% from 76.0%
  • The key takeaway from the report is that manufacturing output was even better than the headline suggests given the nice upward revision for November. This is consistent with an economy that closed 2025 on a good note, notwithstanding the government shutdown in October.
• January NAHB Housing Market Index 37 vs (Briefing.com consensus 40); Prior 39