Major U.S. equity indexes finished a volatile week mixed, as large-cap tech stocks suffered their worst week since November while small-cap and value stocks added to their YTD gains. Worries about the disruptive potential of AI, as well as concerns regarding a surge in capex, weighed on many of the high-growth stocks that have outperformed in recent years. In contrast, some cyclical and value-oriented segments outperformed as investors seemed to rotate into the areas that have lagged firms with more AI exposure. Corporate earnings and geopolitical tensions also appeared to contribute to the week’s volatility. The Nasdaq performed worst, shedding 1.84%, while the S&P 500 finished little changed. On the other hand, the Russell 2000 and the Dow Jones posted solid gains (and hit $50k for the 1st time). The Russell 1000 Value outpaced its growth counterpart by over 400 basis points. On the U.S macro slide, ADP payrolls disappoint, job openings slide while layoffs spike. ISM Manufacturing activity rebounds in January while ISM services are unchanged. U.S. Treasuries yields decreased across most maturities. The pan-European STOXX Europe 600Index made a new intraday high and gained 1.00% as ECB rates stay unchanged and inflation slows faster than forecast. Japan equities gained while China stocks dumped. The dollar ended the week higher while bitcoin fell as low as $60kbefore rebounding to $70k on Friday. Gold ended the week 1% higher but was very volatile. Oil weakened.
Have a great weekend
Charles& Syz Lab research