Market Optimism and Economic Uncertainty Shape U.S. Stock Rebound

U.S. stocks experienced a rebound as 2025 approaches, driven by megacap growth companies like Tesla and Nvidia. However, all three major indexes saw a weekly decline. Market strategies, along with ISM's PMI growth, suggest economic resilience, albeit challenged by potential inflation from Trump's policies.

In a holiday-shortened week, U.S. stocks rebounded on Friday, propelling all three major stock indexes to a higher close. Growth powerhouses like Tesla and Nvidia led the rally, positioning Nasdaq at the forefront despite the indexes' overall weekly decline.

The S&P 500 logged its third weekly loss in four, despite 2024 being a significant year for equities, powered by AI technology advancements and the Federal Reserve's first rate cuts since 2020. Market strategist Ryan Detrick from the Carson Group noted the return of investors, hoping the bullish sway might persist.

The ISM's PMI rose unexpectedly, further fueling optimism, while Richmond Fed President Thomas Barkin expressed a positive economic outlook for 2025 amidst the incoming Trump administration's trade and economic policies. Meanwhile, market responses varied, from Microsoft's AI investments to Biden's national security-driven blocking of U.S. Steel's sale to Nippon Steel.

(With inputs from agencies.)