📊 Weekly Market Recap
- S&P 500 return Year-to-date were approximately 0.93%
- S&P 500 3 month return were approximately 4.64%
- S&P 500 return over the past 5 days were approximately 1.07%
This Week in the Markets – 3 Things to Know
Tariffs Struck Down– The Supreme Court ruled this morning that Trump’s tariffs were an unconstitutional use of the law they were declared under. He immediately responded by declaring a 10% tariff on everything (similar to Michael Scott declaring bankruptcy). What happens to the money already collected and will you be getting a refund? Nobody knows! The court kicked the tricky parts back down to lower courts to figure out, so don’t expect any kind of resolution soon. It’s also unlikely that companies that raised prices in response to the tariffs will now cut prices in response, but I suppose its theoritically possible.
Cracks Beneath the Surface– Rising geopolitical tensions, particularly between the U.S. and Iran, pushed crude oil prices to multi-month highs this week, creating a fresh headwind for U.S. equities. Higher oil prices tend to feed directly into inflation expectations, which can pressure stocks by keeping interest rates higher for longer and raising input costs for businesses. U.S. major indexes moved back and forth as investors weighed stronger energy prices against the potential drag on consumer spending and corporate margins. Energy stocks benefited from the move in oil, but those gains were often offset by weakness in rate-sensitive and consumer-focused sectors.
Fast Lane to Cruise Control– Economic growth cooled noticeably into year-end, with real GDP slowing sharply in the fourth quarter compared to the prior quarter, signaling that momentum in the economy has clearly moderated. While growth didn’t rise, it became more uneven, with consumer spending still supporting activity but doing so at a more restrained pace. Business investment actually improved, suggesting companies are still willing to spend, though they’re being far more selective about where they deploy capital. The main drags came from declines in government spending and exports, which helps explain why overall growth lost steam despite resilient private demand. Inflation sent mixed signals, keeping policymakers cautious and reinforcing the Federal Reserve’s wait-and-see stance now opening the door for more possible rate cuts this year.
Slowing Growth, Sticky Demand, and a Market in Balance
The latest GDP breakdown revealed real growth slowing to a 1.4% annualized pace in Q4. Consumer spending and business investment remained solid contributors, signaling households and firms are still active, but those gains were offset by a meaningful drag from government spending and exports. The message for markets is straightforward: the economy is cooling, not cracking, which explains why rallies have struggled to extend while pullbacks continue to find buyers.
Under the surface, market behavior reflected that same push and pull. Bond yields quietly influenced equity positioning as investors adjusted expectations around growth and policy timing. Rather than a broad risk-off move, this has been a period of internal rotation, rewarding balance sheets, cash flow, and patience over outright momentum chasing.
Looking ahead, markets remain highly dependent on confirmation from upcoming inflation and labor data. If growth continues to slow in an orderly way while inflation trends improve, the backdrop could support stabilization and selective upside. However, until clarity improves around the timing and magnitude of potential policy easing, volatility is likely to remain elevated. For now, the market appears less focused on chasing highs and more focused on managing risk suggesting a range-bound, data-driven environment remains the most likely path near term.
S&P 500 SECTOR SNAPSHOT – Past Week
