The S&P 500 index shed 1% last week amid worries about competition in the technology sector and the Trump administration’s tariff plans, but the market benchmark still ended January with a monthly gain of 2.7%. It is also up 25% from a year ago.
The market received quarterly earnings reports from a number of companies last week, with many surpassing analysts’ mean estimates, including Apple and Visa.
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Also, the Federal Reserve’s preferred inflation measure, the personal consumption expenditures price index, met expectations with a 0.3% increase for December. On Wednesday, the central bank’s Federal Open Market Committee maintained the range of its policy rate at 4.25% to 4.5%, as expected, but made changes to its statement that showed inflation remains elevated while removing an acknowledgment of progress.
Nevertheless, investors are nervous about how inflation may be impacted by the Trump administration’s planned tariffs. On Friday, White House Press Secretary Karoline Leavitt said President Donald Trump will begin implementing a 25% tariff on Mexico and Canada, and a 10% tariff on China on Saturday.
Worries also ramped up over how well the U.S. technology sector will be able to compete in the artificial intelligence space amid the entry of a new AI model from DeepSeek, a Chinese startup company, that generated a lot of chatter.
The technology sector had the largest percentage drop in the S&P 500 last week, falling 4.6%, followed by a 3.8% decline in energy and a 2.1% loss in utilities. Industrials, real estate, and materials also posted weekly declines.
However, on the upside, communication services rose 2.7%, followed by a 1.9% advance in consumer staples and a 1.7% increase in health care. Financials and consumer discretionary also edged higher.
This week’s earnings calendar includes Google parent Alphabet, Merck, Pepsico, Pfizer, Amazon.com, Eli Lilly, and more.
Economic data will feature January employment numbers, with ADP’s private sector employment report on Wednesday and the government’s nonfarm payrolls and unemployment rate due Friday. Other data on this week’s calendar will include January automotive sales, December factory orders and wholesale inventories, and January consumer sentiment.
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