Wall Street on Friday surged to its best weekly performance since the post-election rally in November 2024. After a topsy turvy December and a rocky start to the new year, the bulls came roaring back over the past couple of days. Wednesday, in particular, saw the three major averages post their best intraday advance since November 6, 2024, while the bond market also saw some much needed relief. The primary driver of the moves was the core consumer price index (CPI) reading for December 2024, which surprised to the downside coming in at 2.9% . The favorable inflation data reignited bets that the Federal Reserve will continue to ease monetary policy.

Sentiment this week was also boosted by a strong start to the earnings season in the form of solid quarterly results from major banks. JPMorgan, Citi, Wells Fargo, Goldman Sachs, Bank of America, and Morgan Stanley all delivered quarterly beats driven by investment management activity and trading gains in what was a massive year for markets in Q4 2024. 

For the week, the S&P 500 advanced 2.9%, while the Nasdaq Composite climbed 2.5%. The Dow surged 3.7%.

Future Wealth’s View

While positive banking results and the lower CPI reading were certainly well received by the market, one that did not get quite as much attention was blow out results from TSMC (Taiwan Semiconductor Manufacturing Company) – the company that manufactures all of NVidia’s chips as well as those from Avago and Apple. “Even after more than tripling in 2024, we forecast our revenue from AI accelerators to double in 2025 as a strong surge in AI-related demand continues as a key enabler of AI applications,” said the CEO of TSMC on its earnings call on Thursday. The strong results from TSMC bodes well for tech earnings that are soon to follow in the next week.

With earnings season starting well and setting the stage for a strong January, it brings back to mind the popular saying on Wall Street – “As goes January, so goes the rest of the year”.

In a boon to all parents with teenage kids, TikTok abruptly shut itself down to U.S. users late last night just as a nationwide ban took effect. But, even before the kids put their phones down and joined their parents for dinner for the first time in many, many months – Donald Trump said he will “most likely” allow TikTok to return when he takes office Monday.