The stock market staged a recovery last week even as Wall Street navigated through a mix of uplifting and unsettling news. On Friday, the Nasdaq ended its five-week losing streak, supported by significant gains in leading tech companies such as Meta Platforms, Nvidia, and Amazon. This tech-centric index concluded the week with a 1.9% increase. Meanwhile, the S&P 500 rose by 1.1% over the holiday-shortened week, breaking a two-week losing streak.
A notable Supreme Court decision on Friday, striking down President Donald Trumpās emergency tariffs, benefited shares of consumer-facing companies otherwise burdened by increased import costs. However, overall market gains were tempered by private credit concerns related to Blue Owl Capital, which created fluctuations in financial stocks. Fortunately, bank stocks remained resilient, with Wells Fargo leading with a 2% increase, followed closely by Goldman Sachs at 1.9% and Capital One at 0.5%.
The Supreme Court's decision in a 6-3 vote invalidated most of Trumpās extensive tariff agenda, stating that no president had previously used the statute to impose such comprehensive tariffs. The ruling requires Trump to obtain clear congressional authorization for any new tariffs. In response, Trump threatened 10% global tariffs, though they can only be in place for 150 days without further congressional approval. A clearer perspective on tariff policies is anticipated in Trumpās upcoming State of the Union address to Congress. Stocks previously affected by tariffs, like Nike, didnāt see substantial gains, reflecting skepticism about alternative tariff strategies being enacted.
Mega-cap tech stocks demonstrated a strong comeback, led by Meta announcing a significant implementation of Nvidia chips in its data centers, resulting in share price jumps of 2.5% and 3.8% for Meta and Nvidia, respectively. Amazonās shares increased by 5.6% for the week after it was revealed that Bill Ackman's Pershing Square had significantly increased its holdings in the company. Alphabet also experienced a turnaround after an initial dip post-earnings, boosted by additional investments.
Lastly, concerns around private credit at Blue Owl Capital introduced volatility within the financial sector, seriously impacting shares on Thursday with a drop of nearly 6%.