The S&P 500 (^GSPC) just capped its best first four trading days under a new president since Ronald Reagan’s first week in 1985.
The week ahead will bring investors a deluge of news that will put that rally to the test.
Earnings from more than 100 members of the S&P 500 — highlighted by results from tech heavyweights Meta (META), Microsoft (MSFT), Apple (AAPL), and Tesla (TSLA) — are set for release, with Wednesday serving as the week’s busiest. Starbucks (SBUX), Exxon (XOM), and Chevron (CVX) are also set to report.
On Wednesday afternoon, the Federal Reserve will also announce its latest monetary policy decision, with the central bank expected to keep interest rates unchanged and investors focused on what Fed Chair Jay Powell has to say about the balance of 2025.
Last week, the S&P 500, Nasdaq Composite (^IXIC), and Dow Jones Industrial Average (^DJI) each rallied during a holiday-shortened four day trading week. Over the last five days, the S&P 500 and Dow have gained more than 2.8%; the tech index is leading gains over that period, rising more than 3.1%.
On Tuesday, markets rallied as the dollar fell after Trump held back from firing off the barrage of universal tariff hikes some expected on his first day in office.
Citi equity strategist Scott Chronert wrote in a note to clients on Friday that throughout the week the implied volatility in rates, the US dollar, and oil all moved lower.
“The pricing out of some downside policy catalysts was a cross-asset phenomena,” Chronert said. “Thus far, we have seen less macro disruption than initially expected.”
On Wednesday, Trump sparked an AI rally after he announced a new $500 billion private-sector investment dubbed “Stargate” to build artificial intelligence infrastructure in the US, with Oracle (ORCL), ChatGPT creator OpenAI, and Japanese conglomerate SoftBank (9984.T) among those committing to the joint venture.
Oracle and SoftBank — along with Microsoft and Nvidia (NVDA) — rallied on the news.
In week one, not only were the market’s fears on tariffs not realized, but the still-hot AI trade came back to the fore. A comfortable start to the second Trump administration.
With a busier week of market news expected, investor focus on Trump’s policies will be tested as the typically market-moving Fed announcement highlights the week’s economic news.