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.

Most US equities indexes ended the week lower, although the tech-heavy Nasdaq Composite advanced modestly and cleared the 20,000 mark for the first time. The Russell 2000 Index recorded a second consecutive week of underperformance against the S&P 500 Index. Growth stocks posted a third consecutive week of outperformance versus value, thanks in part to gains in shares of Tesla (12%) and Alphabet (8.4%). On the macro-economic side, stagflation fears started to rise once again. Indeed, YoY CPI and PPI both accelerated. Meanwhile overall macro surprises disappointed for the fourth week in a row: on Thursday, the Labor Department reported a surprise jump in weekly initial jobless claims to a two-month high of 242,000.

Nasdaq was the week's biggest winner among the US majors equity indices in a week that saw the S&P 500 Index, Dow Jones Industrial Average, and Nasdaq Composite all continue to hit record highs, while the Russell 2000 Index declined after back-to-back weeks of outperformance versus its larger-cap peers. The Russell 1000 growth index outperformed Russell 1000 value by 553bps, the largest margin since March 2023. Sector performance was also widely dispersed as consumer discretionary, communication services, and IT stocks all gained over 3% for the week, while energy, utilities, and materials stocks all fell over 3%. Geopolitical headlines through the first half of the week were largely dominated by French and South Korean politics, though these seemed to have limited impact on U.S. markets.

Stocks recorded another week of gains, lifting the Dow Jones Industrial Average, S&P 500 Index, and S&P 400 MidCap Index to record intraday highs. Domestic policy and geopolitical factors appeared to be large drivers of sentiment during the week. On Monday, investors seemed to welcome President-elect Donald Trump’s nomination of Scott Bessent, a veteran hedge fund manager, as Treasury secretary. News of a cease-fire agreement between Israel and Hezbollah, first reported Monday and formally announced Tuesday, seemed to support sentiment and may have overshadowed news that the president-elect plans to quickly impose 25% tariffs on imports from Mexico and Canada, along with an additional 10% tariff on imports from China.

Major stock indexes finished the week higher, recovering some of the previous week’s losses despite some continuing uncertainty around the incoming Trump administration’s policies and escalating geopolitical tensions between Russia and Ukraine. Gains for the week were also relatively broad-based, with small caps outperforming large-caps and an equal-weighted version of the S&P 500 Index outpacing the main index. Shares of Nvidia ended the week little changed as investors appeared to be generally satisfied with the results, although the guidance for Q4 was lighter than some analysts expected. Solid US economic data sparked a rethink of Fed rate-cut expectations, with the curve now pricing in a 50-50 chance of 2 or 3 cuts by the end of 2025.

US equities gave back a portion of the previous week’s gains, as uncertainty over the incoming administration’s policies appeared to continue driving the so-called Trump Trade. Financials and energy shares continue to benefit from hopes for deregulation and merger approvals. Likewise, the price of Bitcoin had surged by nearly a third since the eve of the election, as investors anticipated looser regulation of digital currencies. Conversely, health care shares fell sharply following news that Robert F. Kennedy, Jr., would be Trump’s nominee to head the Health and Human Services Department (HHS). On the macro side, yoy US headline inflation rose for the 1st time since March, from 2.4% to 2.6%. PPI data came in above expectations.

Most of US equities indices rose to record highs, as investors wagered that a “red sweep” (Republicans winning Presidency, Senate and Congress) would result in faster earnings growth, looser regulations, and lower corporate taxes. The small-cap Russell 2000 Index surged 8.57% for the week but was the sole benchmark to remain out of record territory. Meanwhile, the Dow Jones hit 44.000 for the first time while the S&P 500 closed just shy of 6,000, up 4.7% for the week, its best weekly gain in almost a year. On Thursday, the Fed announced a 25bps rate cut, its first easing move since cutting rates by 50 basis points in mid-September. In terms of economic data, the October ISM services sector activity came in at 56.0, well above expectations and the best reading since August 2022. U.S. Treasuries generated positive returns heading into Friday, as yields largely ended lower than where they ended the previous week.

The Nasdaq Composite reached record intraday highs on Wednesday before falling back sharply on Thursday. Over the week, growth stocks generally lagged value shares. Small-caps also held up much better than large-caps. 42% of the companies in the S&P 500 Index reported their Q3 earnings over the week, including five of the Mag 7. Microsoft and Apple were the biggest losers of the week whereas Amazon and Google gained. On the macro side, the Labor Department reported “essentially unchanged” nonfarm payrolls over the month, with employers adding only 12,000 jobs—the lowest number since December 2020. It included a decline of 44,000 jobs due to the Boeing strike.

The S&P 500 Index finished lower after posting gains in each of the six previous weeks as rising Treasury yields weigh on U.S. stocks. Large-cap stocks held up better than small-caps, and growth stocks outperformed value as the Nasdaq Composite Index gained slightly. Tesla was the best performer in the S&P 500 and led the Magnificent Seven, helping to keep the broad index from a steeper decline. The EV car maker posted better than expected quarterly earnings while Elon Musk projected strong sales growth in 2025. The stock recorded its best daily gain (22%) in more than 11 years on Thursday. Meanwhile, Apple dumped as Wall Street analysts downgraded their views on the stock. In Fixed Income, the 10-year U.S. Treasury yield climbed about 10 bps on Monday to 4.20% and stayed around that level for the rest of the week.

US equities recorded another week of gains. Banks were big winners this week while Energy stocks pulled back in sympathy with oil prices, which retreated as fears of possible Israeli attacks on Iran’s oil and gas infrastructure subsided. The small-cap Russell 2000 Index and the S&P MidCap 400 Index outperformed large-caps.  After lagging for much of the week, the Nasdaq Composite rallied during Friday’s trading session. Strong quarterly results from Taiwan Semiconductor Manufacturing boosted AI-related stocks. The Nasdaq also received a lift from Netflix, which grew its subscriber numbers and expanded its operating margins by more than expected in the third quarter. On the Macro side, US retail sales and weekly jobless claims surprised positively while industrial production dropped 0.3% in September after increasing 0.3% in the preceding month.