Stock market today: Wall Street finishes its best week since Trump's election with a rally

[January 18, 2025]  By STAN CHOE

NEW YORK (AP) — U.S. stock indexes closed their best week in two months with a flourish on Friday.

The S&P 500 climbed 1% to clinch its first winning week in the last three. The Dow Jones Industrial Average rose 334 points, or 0.8%, and the Nasdaq composite rallied 1.5%.

SLB helped lead the market after the provider of services to oilfields delivered bigger profit and revenue for the end of 2024 than analysts expected. It jumped 6.1% after it also raised its dividend by 3.6% and said it’s returning $2.3 billion to its investors by buying back its own stock.

The most forceful pushes upward came from Big Tech stocks. All the companies in what’s come to be known as the “ Magnificent Seven ” rose: Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia and Tesla. Because they’re so massive in size, their movements carry more weight on the S&P 500 and other indexes than other stocks.

The Magnificent Seven have been under pressure recently because of criticism their stock prices may have shot too high after leading the market for so many years. Such worries grew after Treasury yields jumped in the bond market. Higher yields hurt prices for all kinds of investments, particularly those seen as the most expensive.

But stocks broadly got a lift this week from an encouraging report on U.S. inflation, which raised hopes that the Federal Reserve may deliver more cuts to interest rates this year. More such cuts, which began in September, would ease the brakes off the economy and boost prices for investments, though they can also give inflation more fuel.

Wall Street has been lurching down and up in recent weeks as economic reports pushed traders to revamp their expectations about what the Fed will do with rates. Lower worries about inflation have sent Treasury yields down and stocks up, while worsening worries about inflation have triggered the opposite reaction.

Treasury yields eased sharply this past week, and the 10-year Treasury yield eased further on Friday. It’s at 4.61%, down from 4.62% late Thursday and from 4.76% a week earlier.

Still, even with this week’s better-than-expected readout on inflation, some on Wall Street remain skeptical about the chances for more cuts. With the U.S. economy in solid overall shape, “you shouldn’t fix what’s not broken,” Bank of America economists Claudio Irigoyen and Antonio Gabriel said in a BofA Global Research report.

They also pointed to the uncertainties created by “Trumponomics 2.0.” Policies pushed by President-elect Donald Trump could help push up inflation, or at least expectations for it, including widespread tariffs and tax cuts for an economy that’s already growing.

People pass the New York Stock Exchange on Nov. 5, 2024, in New York. (AP Photo/Peter Morgan, File)

Prices for all kinds of investments from stocks to cryptocurrencies have swung amid the uncertainty following an initial burst after Election Day. On one hand are hopes for stronger profits for companies and greater acceptance of crypto. On the other are worries about a potentially swelling U.S. government deficit and upward pressure on inflation.

Wall Street still sees banks as some of the biggest beneficiaries from a second Trump administration. Besides a potentially stronger economy, which would boost profits for lending, investors expect another Trump term to mean less regulation on banks.

Truist Financial rose 5.9% Friday after joining the list of banks to report better profits for the end of 2024 than analysts expected. The company said its average deposits rose 1.5% during the quarter, and it followed bigger-than-expected profit reports from large rivals like Wells Fargo, Citigroup and others.

Other smaller, regional banks reported mixed results on Friday. Regions Financial fell 1.3%.

J.B. Hunt Transport Services dropped 7.4% for the biggest loss in the S&P 500 after falling short of analysts’ expectations for profit in the latest quarter. Higher equipment and insurance-related costs helped drag on its results.

All told, the S&P 500 rose 59.32 points to 5,996.66. The Dow Jones Industrial Average gained 334.70 to 43,487.83, and the Nasdaq composite jumped 291.91 to 19,630.20.

In stock markets abroad, indexes rallied in Europe after finishing mixed in Asia.

Chinese indexes rose modestly after authorities said the world’s second-largest economy grew at a 5% annual pace last year, hitting the government’s target but slowing from the year before. Stocks rose 0.3% in Hong Kong and 0.2% in Shanghai.

Economists are forecasting a further slowing of growth this year and beyond for the world’s second-largest economy, and Trump’s threats to raise U.S. tariffs on Chinese goods have added to Beijing’s challenges as it faces a raft of moves by Washington to limit access to advanced technology, such as computer chips used in artificial intelligence.

In Tokyo, the Nikkei 225 fell 0.3% as Nintendo sank 4.3% following the unveiling of its newest console. The company promised more details about the Switch 2 in April and said it will be released this year.

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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.

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