The S&P 500 Index ($SPX) (SPY) fell -0.03% on Friday, the Dow Jones Industrials Index ($DOWI) (DIA) fell -0.04% and the Nasdaq 100 Index ($IUXX) (QQQ) fell -0.05%. March E-mini S&P futures (ESH26) fell -0.08% and March E-mini Nasdaq futures (NQH26) closed -0.07%.
The S&P 500 index reached a new all-time high on Friday, but then retreated and closed the day slightly lower. Stocks ran out of gas on Friday ahead of the weekend, but the S&P 500 Index still closed the week up +1.4%, and the Nasdaq 100 Index closed the week up +1.2%.
The 10-year Treasury yield fell -0.6 bps on Friday, giving the stock market some underlying support. Additionally, the odds of an FOMC rate cut at its meeting rose back to 20% from Tuesday’s low of 13%.
Stocks were supported during the week by confidence in the US economic outlook following Tuesday’s news that US third quarter real GDP rose +4.3% (quarter-on-quarter annualized), well above market expectations of +3.3%.
Gold, silver and platinum hit new all-time highs on Friday on early dollar weakness and geopolitical concerns, as the United States strikes targets in Nigeria and tensions in Venezuela.
The United States on Thursday launched strikes against ISIS targets in Nigeria in a security and intelligence collaboration with the Nigerian government to combat growing terrorist attacks in the country. Nigeria is a member of OPEC. Trump previously warned that the United States would attack ISIS in Nigeria if the group did not stop killing Christians.
The US Coast Guard forced the sanctioned oil tanker Bella 1 away from Venezuela and into the Atlantic Ocean, according to a Bloomberg report. US forces have been tracking the ship for several days as part of President Trump’s blockade of sanctioned oil tankers linked to Venezuela. U.S. forces wanted to board the Bella 1 near Barbados on Sunday, but the ship returned to the Atlantic Ocean.
There may be some progress on a peace deal between Ukraine and Russia, as Ukrainian President Zelensky said he hopes to meet with President Trump on Sunday in Florida. Zelensky said a 20-point peace plan is 90% ready, but it depends on the meeting with Trump and cannot be finalized without input from Russia and Europe. Russia reportedly said the 20-point peace plan does not answer many questions.
Seasonal factors are bullish for stocks. According to data from Citadel Securities, since 1928, the S&P 500 has risen 75% of the time in the last two weeks of December, rising 1.3% on average.
Markets are pricing in the odds of a -25bp rate cut at the next FOMC meeting on January 27-28 at 20%.
Foreign stock markets closed higher. The Euro Stoxx 50 was closed on Friday due to the Christmas holidays. China’s Shanghai Composite closed up +0.10% for its eighth consecutive daily gain. Japan’s Nikkei Stock 225 closed up +0.68%.
Interest rates
March 10-year Treasuries (ZNH6) rose +2.5 ticks. The 10-year Treasury yield fell -0.6 bp to 4.128%. Treasury bond prices were supported by Friday’s -2.5% drop in the price of crude oil and the -1.2bp drop in the implied 10-year inflation expectations rate to 2.225%.
European government bond markets were closed on Friday as part of the Christmas holidays.
The swaps price in a 4% probability that the ECB will raise rates +25 bps at its next monetary policy meeting on February 5.
US Stock Engines
Magnificent Seven shares closed mixed on Friday. Nvidia (NVDA) rose +1.0%, but Tesla (TSLA) fell -2.10% and four other Magnificent Seven stocks also closed lower.
Nvidia (NVDA) rose +1.0% following news of a licensing deal with AI startup Groq as a means to include Groq’s AI inference and low-latency chip technology into Nvidia’s product line.
Chip stocks closed mixed, with a bullish lead from Nvidia. Additionally, Asml Holding (ASML) and Broadcom (AVGO) closed up +0.6%. However, Arm Holdings (ARM) and NXP Semiconductors (NXPI) closed down more than -1%.
Cryptocurrency-exposed stocks closed mostly lower, with Bitcoin (^BTCUSD) falling around -0.4%.
Galaxy Digital Holdings (GLXY) fell more than -4%. Mara Holdings (MARA) and Riot Platforms (RIOT) fell by more than -3%. Coinbase Global (COIN) fell -1.2%.
Energy companies showed weakness across the board due to the -2.4% drop in crude oil prices on Friday. Devon Energy (DVN) and Marathon Petroleum (MPC) fell more than -1%.
Mining companies strengthened: gold, silver and platinum hit record levels and copper traded higher. Coeur Mining (CDE) and Freeport McMoRan (FCX) closed with gains of more than 2%. Hecla Mining (HL) and Newmont Mining (NEM) are up +1% or more.
Target (TGT) closed up more than +3% after the Financial Times reported that activist investor Toms Capital Investment Management had acquired a stake in the retailer.
Earnings Reports (12/29/2025)
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On the date of publication, Rich Asplund had no (directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. This article was originally published on Barchart.com
