Market Recap: S&P 500, Nasdaq Climb as Apple Gains, Inflation Meets Expectations
Major Indexes Close Higher, Capping a Strong January
On Friday, January 31, 2025, U.S. stock markets ended the day and the month on a positive note, with the S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) posting gains. The upbeat sentiment was driven by strong earnings reports, particularly from tech giant Apple (AAPL), and inflation data that met economists’ expectations.
The S&P 500 rose 0.8%, while the tech-heavy Nasdaq climbed 1.3%. The Dow Jones Industrial Average (^DJI) also advanced, albeit more modestly, gaining 0.2%. This positive performance capped off a strong month for all three major indexes, with the S&P 500 up 3.5%, the Nasdaq adding 2.3%, and the Dow leading with an impressive 5.6% gain for January.
Apple Earnings Boost Tech Sector
Apple (AAPL) shares rose in extended trading after the company issued guidance calling for revenue growth in the current period. The tech giant’s services segment, which includes subscriptions, warranties, and licensing deals, continued to be a bright spot. Apple reported a 14% year-over-year revenue growth in its services division, compared to a 4% overall company-wide revenue growth for its fiscal first quarter of 2025.
Other tech stocks also performed well, with Nvidia (NVDA) jumping 9% as the market rebounded from the previous day’s selloff triggered by Chinese startup DeepSeek’s AI breakthrough announcement.
Inflation Data and Fed Expectations
The December personal consumption expenditures (PCE) price index, the Federal Reserve’s preferred inflation gauge, met expectations. The headline inflation increased 0.3% month-on-month and 2.6% annually, while core inflation, excluding food and energy, rose 0.2% monthly and remained steady at 2.8% annually.
This data, along with recent market performance, has investors speculating about the Federal Reserve’s next moves regarding interest rates. The central bank held rates steady in its latest decision, with Fed Chair Jerome Powell indicating no rush to cut rates until inflation and jobs data make it appropriate to do so.
Oil and Energy Sector in Focus
The energy sector saw mixed results as investors awaited news on potential tariffs. President Donald Trump announced plans for 25% tariffs on imports from Canada and Mexico, set to begin on March 1, 2025. However, he indicated that oil imports might be exempted, saying, “Oil is going to have nothing to do with it as far as I’m concerned.”
Exxon Mobil (XOM) rose 0.8% after beating fourth-quarter profit estimates, while Chevron (CVX) fell 2.2% following disappointing earnings results.
Upcoming Market Events
Investors are keeping an eye on several upcoming events that could impact market performance:
1. Earnings releases: More major companies are set to report their quarterly results in the coming weeks.
2. Economic data: Key reports on employment, manufacturing, and services sectors are expected.
3. Federal Reserve decisions: Markets will be watching for any signals of potential rate cuts in future Fed meetings.
4. International trade developments: The implementation and impact of new tariffs on Canada and Mexico will be closely monitored.
Stock Highlights
Notable stock movements on Friday included:
– Microsoft (MSFT): Up 0.46% to $416.91
– Tesla (TSLA): Gained 2.79% to $411.45
– Intel (INTC): Fell 1.95% to $19.62
– Walgreens Boots Alliance (WBA): Dropped 8.60% to $10.48
– Deckers Outdoor (DECK): Plummeted 18.58% to $181.65
– AbbVie (ABBV): Surged 5.43% to $185.19
As we move into February, market participants will be closely watching for signs of continued economic growth, inflation trends, and corporate performance to gauge the direction of stocks in the coming months.
