U.S. stock markets staged their best week in a long time this past week. Despite lackluster trading conditions, major indices posted impressive Tuesday gains. The small-cap stock index Russell 2000 jumped by 1.82%. This amazing advancement stands as its highest weekly gain since January 17, 2025, an encouraging new trend after two weeks of losses. The Russell 2000 staged a powerful rally. This was in the wake of its prior best weekly performance of 3.96% on January 17, 2025.
Russell 2000 up 9.63% and the Nasdaq Composite up 13.48%. It shot up 7.29% – its biggest weekly gain since November 11, 2022. Equally important, it had its first up week in three, snapping a disappointing streak. The momentum had an uphill climb in many respects. On Thursday, the CBOE Volatility Index spiked above 50, indicating a steep increase in market volatility.
Believe it or not, the Dow Jones Industrial Average just had its best week of all-time! It soared 4.95%, its biggest single-day gain since Friday, November 3, 2023. This rally was an important turnaround for the index, which had fallen in the last two weeks. Futures linked to the Dow jumped by another 251 points, or 0.6%, continuing to build on overall bullish momentum.
Even with these advances, equities gave back a few of their monumental profits from prior in the week. The CNBC Magnificent 7 Index, which tracks the seven largest tech companies, experienced a decline of approximately 5% during this period. Over the past few days, Apple’s stock was under heavy pressure. The tech behemoth saw almost $640 billion in market capitalization evaporate in just three trading days following the last announcements.
In this context, Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets, has explained the forces driving these market shifts.
“The mid-week delay on some non-China tariffs, along with solid bank earnings and optimism about Fed intervention (should it be needed) at the end of the week helped fuel the gains in U.S. equities, with some also attributing Wednesday’s bounce to short covering.” – Lori Calvasina
Calvasina noted that new market dynamics have eased fears toward the bond market. She too pointed to a receding of fears over an impending recession.
All of the major indices pretty much soared. Specifically, the S&P 500 jumped 5.70%, for its largest weekly advance since the week of November 3, 2023. This was one of the biggest reversals in recent memory for a benchmark that had been under downward conviction in recent weeks.
As we move toward 2021, investors continue to be cautiously optimistic about what is happening, both at home and across the world. The prevailing volatility at the beginning of this week inspired most analysts to adjust their predictions. They’ve backed down to set the expectation for performance going forward.
To provide some context, understand that just the other day, Donald Trump railed against tariff cuts impacting a modest number of products.
“Subject to the existing 20% Fentanyl Tariffs, and they are just moving to a different Tariff ‘bucket.’” – Donald Trump
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