Major equity indexes declined during the week after the S&P 500 closing at record highs on Tuesday and Wednesday. However, indexes retreated sharply in the latter half of the week. Many of the week’s headlines centered around tariff news and amid President Trump’s efforts to end the Russia-Ukraine conflict. Investor’s sentiment worsened on Thursday partially due to Walmart’s Q4 earnings report. While the retailer beat estimates for the quarter, its guidance for the year ahead fell short, which led to concerns regarding consumer spending and the health of the overall economy. Elsewhere, the S&P Global flash Composite PMI reading came in at a 17-month low of 50.4.

The Nasdaq was the week's best performing major equity index (up almost 3%) followed by the S&P 500. The laggard was Small Caps which ended the week unchanged. Growth stocks outperformed value shares as Technology, Energy, & Materials all outperformed with only the Healthcare sector in the red for the week. Stocks had their best day of the week on Thursday, largely in response to President Donald Trump’s decision to not introduce new global tariffs, instead signing an order that—following further study—could lead to the implementation of reciprocal tariffs on a country-by-country basis by April 1.

Major US stocks indexes declined during the week, although the S&P 500 Index held up best, falling just 0.2%. Stocks opened sharply lower to start the week in response to the prior Friday’s announcement from Trump stating that the U.S. would be implementing 25% tariffs on imports from Mexico and Canada, along with 10% levies on Chinese imports, as of February 1. However, by the end of Monday, Trump had agreed to postpone tariffs on Mexico and Canada for 30 days, which helped stocks recover some of their early losses by the end of the week. Earnings season was another notable driver of sentiment; according to data from FactSet, 77% of S&P 500 Index companies that have reported Q4 results have posted consensus-topping earnings, with an average growth rate of 16.4% (compared with estimates for 11.9% earnings growth).

U.S. stocks finished the volatile week mostly lower, although the Dow rose modestly to notch its third straight week of gains. The Nasdaq Composite experienced a particularly steep drop on Monday, driven by a sell-off in tech stocks in response to the emergence of DeepSeek, a Chinese AI developer, which released a new open-source large language model that reportedly requires much less energy and processing power than other leading AI applications, leading to competitive concerns in the broader AI space. The news led to shares of NVIDIA falling nearly 17% on Monday.

The S&P 500 Index notched a new record high on Thursday before dipping modestly lower on Friday. Growth stocks outperformed value shares during the week for the 1st time this year. Large-caps generally outperformed small-caps. It was a quiet week on the US macro front although it ended on a very down note as Services PMI plunged and inflation expectations soared. Headlines during the week were largely dominated by political developments in the wake of Monday’s inauguration of President Trump. Notably, he did not impose a new round of tariffs on day one—as some had feared—and instead, called for a review of U.S. trade policies to determine the impact of potential future tariffs.

Major U.S. stock indexes finished the week higher, rebounding from a sharp sell-off at the end of the prior week. Value stocks outperformed growth shares by the widest weekly margin since September, driven in part by outperformance in the energy sector amid higher oil prices and some profit-taking in large-cap tech stocks. The financials sector also posted strong weekly gains, aided by some earnings upside surprises. On the macro side, year-over-year US core inflation (less food and energy) slowed in December to 3.2% versus 3.3% in November and lower than expected. This number provides optimism that the Fed is still making progress on bringing down inflation following several months of elevated readings, which keeps the door open for potential rate cuts later in the year.

U.S. equities declined during the week. Small-cap stocks underperformed their large-cap peers for the fifth week in the past six weeks, as the Russell 2000 Index dipped into correction territory. Value stocks held up better than their growth counterparts. The Nasdaq Composite fell 2.34%, its biggest weekly drop since mid-November. The week started on a positive note following a report that the incoming Trump administration’s proposed stance on tariffs was likely to be softer than previously indicated. However, optimism faded throughout the week after President-elect Donald Trump refuted these reports and several pieces of economic data fueled concerns about stubborn inflation.

Major US stock indexes were mixed during the holiday-shortened week, although broad gains on Friday helped indexes finish off their worst levels. On the macro side, the Chicago Purchasing Managers’ Index (PMI) released on Monday came in at 36.9 in December, falling short of consensus expectations of 42.9. December marked the 13th consecutive month of contracting activity and the steepest month-over-month drop since May. Stocks also fell on Thursday, the first trading day of the new year, partially in response to the Atlanta Fed’s downward revision to its Q4 GDP forecast, from 3.1% to 2.6%. In more positive news, the Labor Department reported initial jobless claims of 211,000 for the week ended December 28. US Treasury yields were all lower on the week with the long-end underperforming.

Major US stock indexes produced moderate gains in the final full week of the year. Friday saw a puke in stocks as year-end pension rebalancing hit the market. US macro surprises were negative on the week; , The Conference Board reported that its index of U.S. consumer confidence fell in December to 104.7 from 112.8 in November. For the fourth time in the past six months, new orders for durable goods declined, falling 1.1% versus consensus expectations for a 0.2% rise. New home sales in November also came in slightly below consensus expectations; the Census Bureau reported a seasonally adjusted annual pace of 664,000 compared with expectations for 670,000, Meanwhile, the Labor Department reported on Thursday that applications for unemployment benefits declined slightly to 219,000 for the week ended December 21, the lowest reading since mid-November.

U.S. stocks declined during the week, although a rally on Friday helped major indexes recover some of their lost ground. Losses were broad-based, though smaller-cap indexes generally fared worst. The Fed’s rate cut announcement on Wednesday (25bps) was largely expected. However, sentiment turned negative as investors digested hawkish forecasts and commentary from Fed officials regarding the path forward for interest rates. The hawkish tone helped drive the S&P 500 Index lower by nearly 3% for the day, its second-worst day of the year. Political uncertainty in the form of a looming government shutdown also seemed to rattle investor confidence. In economic news, the U.S. Real GDP grew 3.1% in Q3, outpacing a previous estimate of 2.8%, partially owing to increases in consumer spending.