Thursday, January 16, 2025, was another eventful day on Wall Street, marked by a mix of caution and optimism. While global market trends hinted at easing inflation and selective pockets of growth, the U.S. markets painted a more unsettled picture, with tech stocks struggling, government fiscal challenges in focus, and intriguing forecasts for the year ahead.
One of the day’s headline-grabbing developments was the slide in Apple’s stock, which dropped by 4%, extending its total decline to nearly 12% since its peak in December 2024. This tumble coincided with a troubling report from the research firm Canalys, which revealed Apple’s difficulties in China’s competitive smartphone market. Apple ranked as the third-largest smartphone seller in China in 2024, falling behind domestic rivals Vivo and Huawei.
This significant setback underscores the importance of China for Apple’s sales and growth outlook. More broadly, it raises questions about the resilience of the tech sector, which has long been a cornerstone of market strength. Further compounding the sector’s woes, the “Magnificent Seven” group of leading tech stocks—including Tesla and Nvidia—finished the day in negative territory. Keith Buchanan, a senior portfolio manager at Globalt Investments, captured the challenge: “Tech drives so much of the market’s momentum. When it falters, the broader market feels it.”
Beyond stock performance, attention also turned to the political and fiscal stage, as Scott Bessent, hedge-fund manager and Treasury Secretary nominee for President-elect Donald Trump, appeared before the Senate Finance Committee. Bessent addressed critical issues, dismissing inflation fears tied to Trump’s spending policies while sharply criticizing what he referred to as “out-of-control” government spending. He also expressed skepticism about the need for an official U.S. digital currency, further fueling ongoing debates around fiscal responsibility and technological modernization in financial systems.
While the U.S. markets wrestled with these mixed signals, European markets enjoyed a more positive day. The pan-European Stoxx 600 index rose nearly 1%, buoyed by gains in the luxury goods sector. Richemont, the Swiss luxury giant, led the pack with a remarkable 16% surge in its stock price following a 10% increase in quarterly sales. The upbeat performance had ripple effects, lifting other luxury stocks and providing a morale boost to investors across the region.
The news wasn’t as optimistic, however, in the United Kingdom. The Office of National Statistics reported meager economic growth of just 0.1% in November 2024, missing analysts’ expectations. This underperformance has fueled speculation that the Bank of England may soon lower interest rates to stimulate growth.
Despite Thursday’s market turbulence, optimism remains for the months ahead. UBS issued an encouraging outlook, forecasting that the S&P 500 could see an 11% rise to 6,600 points by year-end. Solita Marcelli, Chief Investment Officer for the Americas at UBS Global Wealth Management, pointed to easing inflation and a resilient stock market as the foundation for this upbeat projection. Meanwhile, Federal Reserve Governor Christopher Waller’s remarks offered further hope. Waller suggested that three or four interest rate cuts might be on the table in 2025 if inflation trends continue to improve, a prospect that could inject fresh energy into the markets.
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