Stocks Rise After Tariff Decision, Breaking Multi-Week Tech Slide

U.S. equities spent most of last week trending lower, ultimately rebounding in a major way last Friday to close the week higher. Investors were in a “risk-off” mode as inflation rose while economic growth slowed notably. However, Wall Street reacted favorably to Friday’s Supreme Court ruling against President Trump’s tariffs. The S&P 500 surged to a one-week high, closing above 6,900, while the Dow pushed past 49,600. The tech-heavy NASDAQ snapped a five-week losing streak. Several market sectors gained more than 2.0% for the week, including Industrials, Communication Services and Utilities. Consumer Staples was the only market sector to end last week lower. Last week also proved to be dynamic for fixed income, with Treasury yields breaking their recent downtrends and moving slightly higher as investors had to digest the Supreme Court ruling, sluggish economic data and geopolitical tensions.

Fourth-Quarter GDP Slows as Consumer Spending Cools

The initial estimate of gross domestic product for the fourth quarter of 2025 showed the economy expanded at an annualized rate of 1.4%, which was below the third-quarter growth rate of 4.4%. Personal consumption expenditures (consumer spending) rose 2.4% in the fourth quarter compared to a 3.5% increase in the third quarter. The drop in consumer spending was largely attributable to a decrease in goods, which declined from an increase of 3.0% in the third quarter to a decrease of 0.1% in the fourth quarter. Consumer spending on services dipped 0.2 percentage point to 3.4%. Government spending, exports and imports also contracted in the fourth quarter, with the decline in goods imports likely attributable to tariffs.

Eye on the Week Ahead

The January data on durable goods orders is out this week, along with the advance report on international trade in goods. The end of the week brings with it the release of the Producer Price Index for January. December saw producer prices increase by 0.5%, while prices rose 3.0% over the last 12 months.