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Mega-cap rebound and macro crosscurrents lift stocks

Stocks finished higher in a holiday-shortened week, with the S&P 500 (+1.1%) and Nasdaq Composite (+1.5%) outpacing the DJIA (+0.3%). Importantly, the S&P 500 closed above its 50-day moving average on Friday and the Nasdaq Composite snapped a five-week losing streak.

Mid- and small-cap stocks also participated, with the S&P Mid Cap 400 (+1.2%) and Russell 2000 (+0.7%) posting solid gains, highlighting broad-based buying amid ongoing rotation. Several mega-cap technology and communication services names, which had slipped in recent weeks following earnings-related weakness, garnered renewed buying interest, helping lift indexes and ETFs. 

Corporate earnings and guidance remained central to market action, driving notable moves across multiple sectors and individual stocks throughout the week. Cyclical sectors including industrials (+1.7%), financials (+1.6%), and energy (+1.7%) contributed meaningfully to the advance, while defensives such as consumer staples (-2.3%) and health care (-0.6%) underperformed, giving back some of their strong gains from previous weeks.

Economic releases underscored a mixed backdrop. Advance fourth-quarter GDP came in at 1.4% versus the Briefing.com consensus of 3.0% (prior 4.4%), while the Q4 Chain Deflator was 3.6% (Briefing.com consensus 3.3%; prior 3.8%), confirming that inflation remains above the Fed’s comfort level even as growth slows. December personal income rose 0.3% (Briefing.com consensus 0.3%; prior revised 0.4%), and personal spending increased 0.4% (Briefing.com consensus 0.2%; prior revised 0.4%), while the December PCE Price Index came in at 0.4% (Briefing.com consensus 0.3%; prior 0.2%), with the core reading also 0.4% (Briefing.com consensus 0.4%; prior 0.2%). The data collectively suggested that the economy continues to expand at a moderate pace, but elevated inflation keeps near-term rate-cut expectations in check.

Geopolitical and policy developments added further complexity. Oil experienced a volatile week amid escalating tensions between the U.S. and Iran, while Friday’s Supreme Court ruling on tariffs briefly unsettled trade-sensitive sectors and contributed to short-term market swings. These events, together with earnings-driven moves, created a dynamic week of headline-driven rotation across sectors and individual names.

Overall, the market demonstrated resilience, with mega-cap technology and communication services seeing a technical rebound, mid- and small-cap stocks participating broadly, and cyclical sectors contributing to gains. Defensive areas lagged, reflecting selective positioning amid a mix of macro, policy, and geopolitical developments, setting the stage for continued focus on earnings, inflation, and international risks in the weeks ahead.

  • Nasdaq Composite: +1.5% week-to-date
  • S&P Mid Cap 400: +1.2% week-to-date
  • S&P 500: +1.1% week-to-date
  • Russell 2000: +0.7% week-to-date
  • DJIA: +0.3% week-to-date

 

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Past performance is not a guarantee of future results. Indices are unmanaged and one cannot invest directly in an index. Diversification does not guarantee investment returns and does not eliminate the risk of loss.

Data and rates used were indicative of market conditions as of the date shown and compiled by Briefing.com. Opinions, estimates, forecasts, and statements of financial market trends are based on current market conditions and are subject to change without notice. References to specific securities, asset classes and financial markets are for illustrative purposes only and do not constitute a solicitation, offer, or recommendation to purchase or sell a security. S&P 500 Index is a market index generally considered representative of the stock market as a whole. The index focuses on the large-cap segment of the U.S. equities market. Each company’s security affects the index in proportion to its market value. NASDAQ Composite Index is a market value-weighted index that measures all NASDAQ domestic and non-U.S. based common stocks listed on the NASDAQ stock market. Dow Jones Industrial Average is a widely used indicator of the overall condition of the stock market, a price-weighted average of 30 actively traded blue chip stocks, primarily industrials, but also includes financial, leisure and other service-oriented firms. Russell 2000 Index measures the performance of the smallest 2,000 companies in the Russell 3000 Index of the 3,000 largest U.S. companies in terms of market capitalization. MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets.

Park Avenue Securities LLC (PAS) is a wholly owned subsidiary of The Guardian Life Insurance Company of America (Guardian). PAS is a registered broker/dealer offering competitive investment products, as well as a registered investment advisor offering financial planning and investment advisory services. PAS is a member of FINRA and SIPC.

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