Volatility Returns as Major Indexes End Week Lower

The U.S. stock market endured quite a bit of volatility last week. A rally last Thursday wasn’t enough to prevent the three major market indexes, the Dow, the S&P 500 and the NASDAQ, from closing in the red. The Global Dow and the small caps of the Russell 2000 posted modest gains by last week’s end. After starting the week with mixed to higher returns, results turned choppy mid-week before Thursday’s rebound. Friday saw stocks tick lower. Consumer Staples, Industrials and Real Estate led the market sectors, while financials underperformed. Last week marked the start of fourth-quarter earnings season, which delivered mixed results from some major banks, although the semiconductor sector provided a major boost. Investors had to decipher plenty of economic news and data, including a pending tariff ruling by the Supreme Court, domestic and international upheaval, the Justice Department’s investigation of Federal Reserve Chair Jerome Powell, and inflation data that was unchanged on its face but showed rising shelter prices, food costs and energy prices. Crude oil prices rose for the second straight week, influenced by lingering geopolitical risks versus easing fears of an immediate U.S. strike on Iran.

CPI Rises 0.3% in December; Annual Inflation Holds at 2.7%

The Consumer Price Index advanced 0.3% in December and 2.7% for the year, which was the same increase as seen over the 12 months ended in November. The largest factor in the December increase was a 0.4% rise in shelter prices. Food prices increased 0.7% over the month, while energy prices rose 0.3% in December. Prices less food and energy rose 0.2% in December. Over the last 12 months, prices for energy increased 2.3%, while food prices increased 3.1%.

Eye on the Week Ahead

The final estimate of gross domestic product for the third quarter of 2025 is scheduled for release this week. The prior estimate showed the economy expanded at an annualized rate of 4.3% in the third quarter.