Stocks Settle Higher as Global Tensions Cool and the Economy Expands

Economic Indicators - The January S&P US manufacturing PMI is expected to increase by +0.2 to 52.0 [1] - The final University of Michigan January US consumer sentiment index is anticipated to remain unchanged at 54.0 [1] - Weekly initial unemployment claims rose by 1,000 to 200,000, better than the expected 209,000 [4] - Q3 GDP was revised upward by 0.1 to 4.4%, exceeding expectations of no change at 4.3% [4] - November personal spending increased by +0.5% month-over-month, aligning with expectations, while personal income rose by +0.3%, below the expected +0.4% [4] - The November core PCE price index rose by +0.2% month-over-month and +2.8% year-over-year, meeting expectations [4] Stock Market Performance - The S&P 500 Index closed up +0.55%, the Dow Jones closed up +0.63%, and the Nasdaq 100 closed up +0.76% [6] - The stock market rally was supported by President Trump's comments on Greenland and strength in chip makers and AI-infrastructure stocks [5][13] - 81% of the 38 S&P 500 companies that reported earnings have beaten expectations, with S&P earnings growth projected to rise by +8.4% in Q4 [7] Sector Movements - Chip makers and AI-infrastructure stocks saw significant gains, with Arista Networks up more than +8% and ARM Holdings up more than +5% [13] - The Magnificent Seven technology stocks also performed well, with Meta Platforms up more than +5% and Tesla up more than +4% [14] - Karman Holdings closed up more than +6% after a strong buy rating was reiterated, while Northern Trust reported Q4 net interest income above consensus [15] Bond Market - March 10-year T-notes closed down by -2 ticks, with the yield rising by +0.6 basis points to 4.249% [10] - European government bond yields increased, with the 10-year German bund yield rising by +0.5 basis points to 2.888% [12]