After a rocky start to 2025, Wall Street is regaining its swing. The three major U.S. stock averages are on pace for their first weekly gain of the year. The S & P 500 and Dow Jones Industrial Average are up 1.9% and 2.9%, respectively, on course for their biggest weekly advance since the U.S. presidential election. The Nasdaq Composite is up 0.9%, headed for its biggest weekly gain since early December. Two catalysts drove the action this week: cooling inflation data and strong bank earnings. The core consumer price index , which strips out food and energy, rose 3.2% in December on a year-over-year basis. That is less than economists anticipated. The producer price index, a wholesale measure of inflation, increased 0.2% month over month, also a slower-than-anticipated advance. The former sent stocks flying on Wednesday, with the Dow soaring about 700 points. The S & P 500 and Nasdaq popped 1.8% and 2.4%, respectively. .DJI mountain 2025-01-13 Dow Industrials this week As for bank earnings, Morgan Stanley , Goldman Sachs and JPMorgan Chase all delivered blockbuster reports. Both Morgan Stanley and Goldman got a boost from strong trading revenue, while JPMorgan posted a record quarter . “This is a good week for markets, benefiting from positive fundamental surprise (Dec CPI soft) and signs of market capitulation,” wrote longtime market bull and Fundstrat head of research Tom Lee. “Overall, we believe this is encouraging and enough that we expect some investors to “dip a toe” and add risk, even if market technicals are not fully confirming.” Lee added that “2025 is set to be a tricky year and January is showing this. But the fact the market is YTD positive is a good sign. Hopefully, we get more decisive signals next week.” Elsewhere Friday morning on Wall Street, Cantor Fitzgerald initiated research coverage of Microsoft with an overweight rating, citing upside ahead from its artificial intelligence business. “Azure is benefiting from AI-related revenues growing triple digits of late with expectations strong growth will continue” in the near term, the firm wrote. “Supply constraints may be easing in 2HF25 (FYE June) with other hyperscalers along with Microsoft expecting a ramp in AI-related revenue as supply comes online for already-booked business.”
Wall Street is getting back its mojo this week