Market Recap: S&P 500, Nasdaq Climb as Apple Gains and Inflation Meets Expectations
Major Indexes Close Higher Amid Tech Earnings and Economic Data
On Friday, January 31, 2025, U.S. stock markets ended the day and the month on a positive note, with major indexes climbing higher. The S&P 500 (^GSPC) rose approximately 0.8%, while the Nasdaq Composite (^IXIC) surged 1.3%. The Dow Jones Industrial Average (^DJI) also gained, albeit more modestly, up 0.2% for the day.
Tech Giants Drive Market Momentum
The day’s gains were largely driven by strong performances from tech giants. Apple (AAPL) led the charge, with its stock rising 3.4% following upbeat executive comments in its earnings report. Investors were reassured by guidance suggesting revenue growth in the low- to mid-single digits for the coming quarter, particularly as the company plans to roll out new AI features.
Intel (INTC) also contributed to the positive sentiment, advancing 1.3% after beating analysts’ low expectations for its December-quarter results. However, Microsoft (MSFT) faced headwinds, dropping 6% following a disappointing growth forecast in its cloud computing business.
Energy Sector Mixed on Earnings Reports
The energy sector presented a mixed picture. Exxon Mobil (XOM) rose 0.8% after beating fourth-quarter profit estimates, while Chevron (CVX) fell 2.2% due to lower-than-expected earnings.
Inflation Data Meets Expectations
A key focus for investors was the release of the December personal consumption expenditures (PCE) price index, the Federal Reserve’s preferred inflation gauge. The data met expectations, with headline inflation increasing 0.3% month-on-month and 2.6% annually. Core PCE, which excludes volatile food and energy components, rose 0.2% as anticipated.
Fed Policy and Interest Rates
The inflation data came on the heels of the Federal Reserve’s latest policy decision, where interest rates were held steady. Fed Chair Jerome Powell indicated that there would be no rush to cut rates until inflation and jobs data make it appropriate to do so.
Market Movers and Shakers
Several stocks made significant moves on Friday:
– Vertex Pharmaceuticals (VRTX) surged 7.2% after FDA approval of its non-opioid painkiller.
– Deckers Outdoor (DECK) dropped 14.7% as its annual sales forecast missed high expectations.
– Walgreens Boots Alliance (WBA) fell 9.8% after suspending its quarterly cash dividend amid restructuring efforts.
AI Developments Shake Tech Sector
The tech sector experienced volatility earlier in the week following news of Chinese startup DeepSeek’s breakthrough in low-cost artificial intelligence models. This development triggered concerns about potential price wars in the AI space, affecting stocks linked to artificial intelligence.
Upcoming Market Events
Investors are keeping a close eye on several upcoming events that could impact market performance:
1. Earnings reports from major companies, including Caterpillar (CAT) and Mastercard (MA).
2. The continuation of the Q4 2024 earnings season, with more tech giants set to report.
3. Ongoing developments in AI technology and its impact on various sectors.
4. Potential trade policy changes, as markets remain vigilant following President Trump’s comments on tariffs.
Monthly Performance
Despite the week’s volatility, all three major indexes were on track for monthly gains. The S&P 500 finished January less than 1% short of its all-time high, continuing the positive momentum from the previous year.
Looking Ahead
As we move into February, market participants will be closely monitoring economic indicators, corporate earnings, and geopolitical developments. The interplay between inflation data, Fed policy, and corporate performance will likely continue to drive market sentiment in the coming weeks.
In conclusion, the stock market’s performance on January 31, 2025, reflected a complex interplay of corporate earnings, economic data, and technological developments. As investors digest this information, the stage is set for what promises to be an eventful start to February in the financial markets.
