Stocks near record highs as investors eye Fed minutes and upcoming manufacturing updates amid positive inflation data.
In Short
The S&P 500 hit a record high due to positive inflation data, raising expectations for Federal Reserve rate cuts. Corporate earnings reports are upcoming, while January inflation trends suggest a slowdown in price growth, reinforcing hopes for future rate cuts.
During the week, the Nasdaq Composite increased by over 2.5%, while the S&P 500 climbed nearly 1.5% and the Dow Jones added about 0.5%.
Corporate earnings season continues, with notable reports expected from Alibaba and Walmart. A total of 46 S&P 500 companies will announce results this trading week, which is shortened due to Presidents’ Day.
Next week promises a quieter economic news schedule, with market attention on the Federal Reserve’s January meeting minutes, along with updates on manufacturing, services, and consumer sentiment.
Recent inflation reports for January indicated higher-than-expected price increases, but economists discerned positive trends. They noted a likely slowdown in price growth within categories relevant to the Fed’s preferred inflation measure, the Personal Consumer Expenditures (PCE) index.
Projections for “core” PCE, which excludes food and energy, are set at 2.6% for January, a decrease from December’s 2.8%. Markets continue to foresee one or two rate cuts from the Fed in 2025, aligning with views that cutting rates is more probable than raising them.
Investors will focus on the Fed’s January minutes for insights into future interest rate plans. The S&P 500’s rise is diverse, with several stocks beyond tech performing well, indicating broad market strength at the start of 2025.
