S&P 500 Sees Best Start For A President Since 1985: Markets Wrap

The S&P 500 experienced a 1.7% increase over the week despite a downturn in chipmaker stocks, marking the best start to a presidential term since Ronald Reagan in 1985. This rise was supported by President Donald Trump's economic policies, including potential tax cuts and a softened stance on China tariffs. However, the market faced challenges with a decline in US consumer sentiment and a slight slowdown in business activity growth. The dollar saw its largest weekly drop since November 2023, while the MOVE Index of expected Treasury volatility reached its lowest since mid-December. Investors are cautiously optimistic about the upcoming big-tech earnings season, particularly regarding AI demand, as evidenced by a $100 billion joint venture between SoftBank, OpenAI, and Oracle.

In the corporate sector, Meta Platforms plans significant AI investments, while Nvidia led losses in big tech. Texas Instruments' disappointing forecast resulted in a 7.5% share drop. The Federal Reserve's upcoming decision is anticipated to maintain current rates, with inflation concerns persisting. The yield on 10-year Treasuries fell slightly, and oil prices dropped for the first time this year. Despite inflation worries, the stock market remains near all-time highs, with corporate earnings outperforming expectations. The Bloomberg Dollar Spot Index fell 0.5%, and cryptocurrencies like Bitcoin and Ether saw gains.

Key takeaways

The S&P 500 had its best start to a presidential term since 1985, climbing 1.7% for the week despite a rout in chipmakers.
Investors are focused on the upcoming big-tech earnings season, with high expectations for artificial intelligence demand.
The Federal Reserve is expected to hold rates steady, with inflation data making a rate cut unlikely in the near term.
Corporate America's strong earnings have been a key catalyst for market optimism, with companies outperforming expectations.

S&P 500 Sees Best Start For A President Since 1985: Markets Wrap

Key takeaways

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