The iShares Semiconductor ETF gained 2.1% on Friday, bettering its nearly 12% rally so far this year, handily beating the Nasdaq 100’s 1.2% gain, underscoring investor confidence in demand for AI chips.U.S. stocks limped to modest weekly losses even after the S&P 500 and the Dow posted new record closes on Monday. The S&P now hovers about 30 points below the 7,000 mark – a point that analysts have seen as a potential source of technical resistance.
Concerns about the impact of a proposed one-year cap on credit card interest rates at 10% weighed on lenders’ stocks and broader markets, despite strong quarterly results from major U.S. banks.
“Banks have set up the week nicely to say that consumers are still spending and nothing is happening yet. We’ll see if that translates into more consumption,” said Jason Barsema, president of Halo Investing.
The markets will remain closed on Monday in honor of Martin Luther King Jr. Day, but earnings season will pick up steam next week with results from companies like Netflix, Johnson & Johnson and Intel. At 9:35 a.m. ET, the Dow Jones Industrial Average rose 67.35 points, or 0.14%, to 49,509.79, while the S&P 500 gained 18.67 points. points, or 0.27%, to 6,963.14 and the Nasdaq Composite gained 114.46 points, or 0.49%, to 23,644.48.
DEFENSIVE SECTORS LEAD WEEKLY PROFIT
Consumer staples, real estate and utilities – largely considered defensive sectors – topped the leaderboard with weekly gains. At the same time, financials declined and headed for their worst week since October.
The defensive rotation comes as uncertainty surrounding the Federal Reserve’s independence flared, after Chairman Jerome Powell said Sunday that the Justice Department had opened a criminal investigation into him. White House adviser Kevin Hassett tried to tamp down the fallout by shrugging off the investigation and saying he expected there would be “nothing to see here.”
The week also saw money shift from some heavyweight tech names into more undervalued areas, with the S&P 600 mid-cap index and the Russell small-cap 2000 index each set to rise about 2% this week.
Meanwhile, a series of key economic data reinforced expectations for a prolonged interest rate pause by the Fed.
Statements from Fed Governors Michelle Bowman and Philip Jefferson later in the day will provide clues to voting members’ thoughts before the U.S. central bank enters its blackout period ahead of its Jan. 27-28 policy meeting.
Among other stocks, State Street fell 2.7% after a decline in fourth-quarter earnings.
Independent power producers fell after a report said US states that see a rapid expansion in data center construction will sign a deal with the Trump administration aimed at curbing rising electricity costs.
Talen Energy fell 9.6%, while Constellation Energy and Vistra each fell more than 7%.
Declining issues outnumbered advancers by a 1.44-to-1 ratio on the NYSE and by a 1.17-to-1 ratio on the Nasdaq.
The S&P 500 recorded 23 new highs and six new lows over the past 52 weeks, while the Nasdaq Composite recorded 46 new highs and 28 new lows.
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