Stocks were volatile last week and finished mostly lower, despite a brief rally late in the week. The Dow, S&P 500, and NASDAQ all ended in the red, while small-cap stocks and the Global Dow posted modest gains. Market sentiment was shaped by the start of fourth-quarter earnings season, mixed results from major banks, and strength in semiconductor stocks. Stock traders also weighed inflation data, geopolitical developments, and uncertainty surrounding tariffs and monetary policy. Treasury yields moved higher, the U.S. dollar strengthened, and crude oil prices rose for a second consecutive week amid lingering geopolitical risks.
Last Week’s Economic News
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Economic growth strengthened in the third quarter, with GDP expanding at an annualized rate of 4.4%, the fastest pace since 2023, driven by consumer spending, exports, government spending, and an improvement in investment.
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Personal income and consumer spending increased modestly in October and November, while inflation remained contained, with the PCE price index rising 0.2% in both months and running near the Federal Reserve’s long-term target.
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Weekly unemployment claims edged higher, though continuing claims declined, suggesting the labor market remains stable overall.
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Gasoline prices moved higher, reflecting rising crude oil prices, but remained well below year-ago levels across most regions.
Eye on the Week Ahead
Attention turns to this week’s Federal Open Market Committee meeting, where policymakers are expected to hold rates steady, though markets are watching closely for signals on the potential timing of future rate cuts.
Have a nice week!
Sincerely,
Robert G. Carpenter