Stocks continued their upward climb last week as excitement around big tech continued; positive economic reports stoked investors’ belief that the Federal Reserve has pulled off a soft landing.

Stocks Power Ahead

Big tech was back last week, pushing the Dow and the S&P 500 to new highs early in the week as markets resumed the late Q4 rally.

The so-called “Magnificent Seven” stocks—comprising 28% of the S&P 500 Index—resumed their pole position at the head of the pack as investors maintained their artificial intelligence (AI)-related bullishness and rewarded widespread cost-cutting at many tech giants. While the rally fizzled on Friday, the week’s gains were slow but steady.^1,2,3

The big economic news last week was better-than-expected economic growth and inflation news. Real Gross Domestic Product grew at a 3.3% annualized clip in Q4 2023, ahead of Wall Street consensus expectations of 2%.

The Personal Consumption Expenditures (PCE) Index, one of the Fed’s most favored inflation gauges, showed core inflation (excluding food and energy) cooled in December, with an annualized rate of 2.9%, beating consensus expectations. Core inflation was 3.2% on an annualized basis—its lowest level since March 2021. While the inflation update didn’t move markets much, it helped validate investors’ optimism that Fed policy has maintained economic growth while bringing inflation down.⁴

Stocks finished higher last week, with big tech again leading amid lingering uncertainty over how continued economic strength would influence the Fed’s rate decision.

Stocks Dip, Then Rally 

Stock prices dropped early in the week before rising to new highs as the week ended. The four-day trading week began with more Q4 bank earnings, which disappointed. The news pushed the financial sector and the broader S&P 500 Index lower on Tuesday. The yield on the 10-year Treasury climbed after a Fed Governor said the central bank may not adjust rates as much as markets expect. That and a stronger-than-expected holiday retail sales report put pressure on stock prices.^1,2,3

Tech stocks drove the Thursday rally, with the S&P and Nasdaq recouping their 2024 losses. Stocks continued their tech-led climb on Friday, with the S&P 500 rising to an all-time high—its first record close in over two years. The Nasdaq gained 1.70% on Friday, capping a solid week for the tech-heavy index.

Stocks pushed higher last week, led by big tech names and boosted by December inflation reports that were mixed but positive enough to shore up investor confidence in Fed rate cuts this year.

Stocks Rock and Roll

It was a rocky week that ended on a high note. Stocks rallied Monday after the prior week’s decline. Tech shares led, with the Nasdaq posting its best day since November 14.

On Tuesday, stocks initially tumbled but recovered most of their losses late in the session. Stocks rallied on Wednesday ahead of inflation news the following two trading days. Stocks fell initially on Thursday in response to a hotter-than-expected inflation report, reflecting investor concerns about the certainty, timing, and extent of Fed rate cuts later this year.

On Friday, the start of earnings season brought mixed results from a handful of major banks. By close, stocks had recovered most of their losses, ending the week with solid gains.^1,2,3,4,5

Stocks retreated in the first trading week of 2024, struggling a bit after a celebratory end to last year as investors second-guessed Fed signals and fretted over lingering inflation concerns.

New Year Blues

Stocks got off to a rough first week of the new year, with tech names leading the week’s decline. Several market observers called it the “reverse Goldilocks” effect, where the market decided investors were getting a little too excited over the prospect of a Fed rate cut.

Stocks bounced up and down each of the four trading days but ended each one down—except Friday, when the Dow Industrials, Nasdaq Composite, and S&P 500 all ended the day in the green when jobs data helped soften the week’s slide.^1,2

All About The Fed

On Wednesday, manufacturing news came in better than expected, lifting markets until the December Federal Open Market Committee meeting minutes were released, revealing that the Fed members had discussed rate cuts for 2024 but in no specific terms.

Jobs and services sector news painted a better picture of the economy on Thursday, but as the 10-year Treasury hit 4%, stock prices responded negatively.

Stocks posted a slight gain last week amid a shortage of news and light holiday trading.

The Dow Jones Industrial Average gained 0.76%, while the Standard & Poor’s 500 added 0.49%. The Nasdaq Composite index advanced 0.32% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, increased 1.13%.^1,2,3

A late-week, two-day rally left stocks higher, adding to November’s gains as the last month of trading for 2023 began.

The Dow Jones Industrial Average was flat (+0.01%), while the Standard & Poor’s 500 gained 0.21%. The Nasdaq Composite index advanced 0.69% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, was up 0.37%.^1,2,3

A Friday rally turned an otherwise mixed week for stocks into a solid performance.

The Dow Jones Industrial Average picked up 2.42%, while the Standard & Poor’s 500 gained 0.77%. The Nasdaq Composite index rose 0.38% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, ended marginally higher by 0.13%.^1,2,3

Investor enthusiasm for stocks remained strong last week, buoyed by declining bond yields in a holiday-abbreviated trading week.

The Dow Jones Industrial Average picked up 1.27%, while the Standard & Poor’s 500 gained 1.00%. The Nasdaq Composite index rose 0.89% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, was flat (+0.03%).^1,2,3

Stocks extended their November rally last week as investors cheered lower-than-forecast inflation data.

The Dow Jones Industrial Average gained 1.94%, while the Standard & Poor’s 500 added 2.24%. The Nasdaq Composite index rose 2.37% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, increased 3.36%.^1,2,3

A powerful Friday rally left stocks higher last week, extending the market’s early November gains.

The Dow Jones Industrial Average rose 0.65%, while the Standard & Poor’s 500 advanced 1.31%. The Nasdaq Composite index jumped 2.37% higher for the week. The MSCI EAFE index, which tracks developed overseas stock markets, edged 0.25% higher.^1,2,3