Bulls get first victory of New Year

US stocks are coming off their biggest up week in more than two months, as bulls embraced market-friendly inflation data and strong numbers from big banks at the outset of earnings season.

The S&P 500’s (SPX) 1.8% rally after a cooler-than-expected core Consumer Price Index (CPI) last Wednesday may have been the standout move, but the week’s tone was arguably set on Monday, when the SPX climbed out of a nearly 1% intraday hole to close higher on the day:

The headline: S&P 500 notches first up week of 2025.

The fine print: Surging oil prices and energy stocks were a major story last week, especially in light of one of the “megatrends” recently discussed by Morgan Stanley & Co. strategists—the potential for rapid evolution in the global energy market.¹

The number: 5. All five of the big banks that reported earnings last week met or beat their headline estimates, and all of them rallied after releasing their numbers.

The scorecard: The Russell 2000 (RUT) small-cap index outpaced the rest of the market last week:

Sector returns: The strongest S&P 500 sectors last week were energy (+6.14%), financials (+6.1%), and materials (+6%). The weakest sectors were health care (+0.3%), consumer staples (+1.26%), and communication services (+1.3%).

Stock movers: H&E Equipment Services (HEES) +105% to $90.29 on Tuesday, Quantum (QMCO) +49% to $33.50 on Wednesday. On the downside, Aehr Test Systems (AEHR) -27% to $11.66 on Tuesday, Arqit Quantum (ARQQ) -37% to $28.28 on Thursday.

Yields: After starting last week by hitting 4.8% for the first time since October 2023, the benchmark 10-year Treasury pulled back to 4.61% by Friday.

Futures: Last week, US spot crude oil prices tagged $80 for the first time in five months. March WTI crude oil (CLH5) hit a contract high of $79.39 last Wednesday before pulling back to end the week up $1.64 at $77.39. February gold (GCG5) rallied $33.70 at $2,748.70 last week. Biggest gainers: January bitcoin (BTCF5) +10.6%, March oats (ZOH5) +10.4%. Biggest decliners: February VIX (VXG5) -10.7%, March sugar (SBH5) -5.2%.

This week’s numbers include:

●Monday: MLK Day (US markets closed)
●Wednesday: Leading Economic Indicators Index
●Thursday: weekly jobless claims
●Friday: S&P Global Manufacturing and Services PMIs (flash), existing home sales, consumer sentiment

This week’s earnings include:

●Tuesday: Archer Daniels Midland (ADM), D.R. Horton (DHI), Fifth Third Bancorp (FITB), 3M (MMM), Stride (LRN), Netflix (NFLX), United Airlines (UAL), Wintrust (WTFC)
●Wednesday: Abbott Labs (ABT), Amphenol (APH), Halliburton (HAL), Johnson & Johnson (JNJ), Procter and Gamble (PG), Alcoa (AA), Crown Castle (CCI)
●Thursday: American Airlines (AAL), Eagle Materials (EXP), GE Aerospace (GE), Union Pacific (UNP), Freeport-McMoRan (FCX), Texas Instruments (TXN)
●Friday: American Express (AXP), HCA Healthcare (HCA),Verizon Communications (VZ)

Check the Active Trader Commentary each morning for an updated list of earnings announcements, IPOs, economic reports, and other market events.

While historical precedents suggested the stock market’s early January performance didn’t necessarily bode well for the month as a whole, last week’s rally provides another pattern to consider.

For the week ending January 10, the SPX fell 1.9% and also hit its lowest low in nine weeks. Last week it gained 2.9%. That two-week pattern hasn’t happened very often—only 17 other times over the past 69 years. While the index declined the following week more often than not (nine times vs. eight up), four weeks later it was higher in 11 cases, with a median return of 3.1%, nearly three times the median gain for all four-week periods.²

Click here to log on to your account or learn more about E*TRADE's trading platforms, or follow the Company on X (Twitter), @ETRADE, for useful trading and investing insights.

¹ MorganStanley.com. Four Key Investment Themes for 2025. 1/15/25.
² All figures reflect S&P 500 (SPX) weekly closing prices, 1957–2024. Supporting document available upon request.