US stocks closed out a strong week on Friday, with the S&P 500 and Dow Industrials posting their biggest weekly percentage gains since early November. The Nasdaq Composite also recorded its best performance in over three months.
Optimism over the economy and interest rates drove the rally, as investors awaited policy changes under President-elect Donald Trump’s administration. Data this week showed a resilient economy, with single-family homebuilding rising to a 10-month high, but demand is expected to be curbed by rising mortgage rates and an oversupply of new properties.
Manufacturing output surged last month, according to separate reports. The Commerce Department also reported that US single-family homebuilding rose to a 10-month high.
Uncertainty over Trump’s policies, including potential tariffs, weighed on equities in recent weeks, but the corporate earnings season has helped buoy stocks this week. Many big banks have reported strong results, with the S&P 500 bank index gaining 7.41% for the week.
“The start to the year is getting off to a reasonably better footing than we’ve been on perhaps in the last few years,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors.
The Dow Jones Industrial Average rose 334.70 points, or 0.78%, to 43,487.83, while the S&P 500 gained 59.32 points, or 1.00%, to 5,996.66 and the Nasdaq Composite gained 291.91 points, or 1.51%, to 19,630.20.
Benchmark US 10-year note yields edged up 1.3 basis points to 4.619%, but have eased off a 14-month high of 4.809% hit earlier this week. The Federal Reserve is widely expected to keep rates steady at its policy meeting later this month, with markets pricing in a greater than 50% chance for a cut of at least 25 basis points until June.
Nvidia and Broadcom gained 3.1% and 3.5%, respectively, after Barclays raised its price targets on the stocks. Intel surged 9.25% on speculation of a takeover, while Qorvo shot up 14.43% after activist investor Starboard Value disclosed a 7.7% stake in the chipmaker.
Advancing issues outnumbered decliners by 2.16-to-1 on the NYSE and by 1.73-to-1 on the Nasdaq. The S&P 500 posted 24 new 52-week highs and no new lows, while the Nasdaq Composite recorded 66 new highs and 73 new lows.
Source: https://www.reuters.com/markets/us/futures-edge-higher-with-all-eyes-trump-inauguration-2025-01-17