The S&P 500 index rose more than 0.7% last week, led by the information technology and consumer discretionary sectors amid an onslaught of quarterly earnings, a monetary policy announcement and the China trade deal.
The index is now up more than 16% year-to-date.
Five members of the so-called Magnificent 7 group, which compose more than a third of the S&P 500, reported earnings on Wednesday and Thursday.
Shares of Amazon (AMZN) ended the week 8.9% higher, followed by Alphabet (GOOG, GOOGL), which jumped 8.2%, and Apple (AAPL), which climbed 2.9%. Meta Platforms (META) shares fell more than 12% during the week, and Microsoft (MSFT) declined 1.1%, reflecting the impact of their planned capital expenditures related to artificial intelligence.
President Trump met with Chinese President Xi Jinping Thursday to finalize a one-year trade agreement between the world’s largest economies that is expected to be routinely extended. China agreed to resume purchases of U.S. soybeans, keep rare-earth exports flowing and crack down on the illicit trade of fentanyl. The U.S., meanwhile, will halve the tariff rate on the Asian nation related to fentanyl, cutting the overall levy to about 47%.
The Federal Reserve on Wednesday cut interest rates by 25 basis points, but Fed Chair Jerome Powell said another reduction in December is not set in stone.
“In the committee’s discussions at this meeting, there were strongly differing views about how to proceed in December,” he said. “A further reduction in the policy rate at the December meeting is not a forgone conclusion – far from it.”
The information technology sector had the largest percentage gain of the week, up 3%, followed by a 2.8% increase in consumer discretionary. Four out of 11 sectors rose, with real estate declining 3.9% and materials shedding 3.7%, respectively.
This week’s earnings calendar includes Uber Technologies (UBER) and Advanced Micro Devices (AMD), among others.
The economic data fog is likely to extend to next week amid the federal government shutdown. Data releases from private agencies will include October’s ISM Manufacturing and Services PMI, Challenger job cuts, and the Michigan Consumer Sentiment survey.
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