Weekly Market Recap:

This week, U.S. equities were mostly lower. The Dow (+0.27%) posted a small gain, while the S&P 500 (-1.00%), Nasdaq (-1.64%), and Russell 2000 (-0.87%) declined. Laggards included semiconductors, software, auto suppliers, industrial metals, energy, and homebuilders. Big tech was mixed, with Nvidia (-15.8%) and Microsoft (-6.5%) dragging the market, while Apple (+5.9%) and Meta (+6.4%) outperformed. Strength was seen in China tech, cruise lines, tech hardware, payments, and banks. Treasuries were firmer, the dollar index rose (+0.9%), gold hit a record high (+2%), and WTI crude fell (-2.9%).

Corporate Highlights:

• Apple (AAPL +5.9%): Q1 EPS beat, strong Services growth, China concerns linger.

• Microsoft (MSFT -6.5%): Weak Azure revenue overshadowed positive AI momentum.

• Meta (META +6.4%): Strong earnings and AI investments boosted sentiment.

• Tesla (TSLA -8.3%): Margins missed, but FSD and new model updates were positives.

• Visa (V +3.5%) & Mastercard (MA +4.1%): Consumer spending remained resilient.

Royal Caribbean (RCL +14.9%): Strong demand lifted results.

Sector Performance:

Outperformers: Communication Services (+2.67%), Consumer Staples (+1.92%), Healthcare (+1.74%). Underperformers: Tech (-4.55%), Energy (-3.79%), Utilities (-2.05%). Markets focused on AI sector volatility, Trump’s tariff threats, and the Fed’s cautious stance. Looking ahead, all eyes are on next week’s payrolls report and key earnings from Google, AMD, Disney, and Amazon.

On January 29, 2025, the Federal Reserve made a decisive move by keeping interest rates steady at 4.25%-4.5%, signaling a shift in its approach after three consecutive rate cuts since September 2024. While the decision was widely anticipated, the language in the post-meeting statement highlighted growing caution among policymakers regarding inflation and economic stability. The central bank’s cautious stance stems from the persistent inflationary pressures that remain despite the significant progress made in cooling down the 40-year high inflation experienced in mid-2022. While inflation has decreased from its peak, it remains above the Fed’s target of 2%. In its latest statement, the Fed removed a key phrase from December’s language that suggested inflation was progressing toward the 2% target. Instead, it acknowledged that inflation is still “somewhat elevated.” This shift reflects a more guarded outlook amid signs of a resilient labor market with low unemployment levels, which complicates efforts to manage inflation. Fed Chair Jerome Powell emphasized that further rate adjustments will depend on clear signs of progress in inflation or a softening of the labor market. The Fed’s cautiousness is compounded by ongoing political volatility, as new political dynamics under President Trump suggest potential tensions with the central bank over its policy direction. As the Fed monitors inflation, its decision to hold rates steady suggests that while economic growth remains solid, the path to stability is far from certain.

Next Week:

Notable Earnings:

• Monday (2/3)

  • Palantir Technologies Inc. ($PLTR)

  • Clorox Co. ($CLX)

• Tuesday (2/4)

  • PepsiCo Inc. ($PEP)

  • Pfizer Inc. ($PFE)

  • PayPal Holdings Inc. ($PYPL)

• Wednesday (2/5)

  • Harley-Davidson Inc. ($HOG)

  • Walt Disney Co. ($DIS)

  • O'Reilly Automotive Inc. ($ORLY)

• Thursday (2/6)

  • Honeywell International Inc. ($HON)

  • Equifax Inc. ($EFX)

• Friday (2/7)

  • Cboe Global Markets Inc. ($CBOE)

Notable Ex-Dividend Dates:

• Monday (2/3)

  • Citigroup ($C) 3.04%

  • Realty Income ($O) 5.90%

• Tuesday (2/4)

  • MetLife ($MET) 2.65%

  • Nokia Oyj ($NOK) 2.00%

• Wednesday (2/5)

  • Brown & Brown ($BRO) 0.57%

  • Banco Bradesco ($BBDO) 11.40%

• Thursday (2/6)

  • RB Global ($RBA) 1.30%

  • Hess Midstream ($HESM) 6.70%

• Friday (2/7)

  • Costco Wholesale ($COST) 0.49%

  • Wells Fargo & Company ($WFC) 2.05%

  • Sunoco ($SUN) 6.35%

  
  

  *Dividend Aristocrat