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A cooler-than-forecast inflation update on the heels of a hotter-than-anticipated January jobs report buoyed the risk-on mood early, heading toward another big but holiday-shortened week for earnings and economic data. The Russell 2000 broke first and fastest on Friday, and the main U.S. equity indexes reflected a return of risk appetite for most of the trading session. But momentum stalled late.
Small caps led the way as seven of 11 stock market sectors closed in the green – not including communication services, tech, consumer discretionary and financials.
At the closing bell, the Dow Jones Industrial Average was up 0.1% at 49,500 but was down 1.2% for the week. The S&P 500 had added 0.05% to 6,836, but the broad index was down 1.4% for the week.
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The Nasdaq Composite was lower by 0.2% at 22,546, the tech-heavy index putting in a 2.1% weekly loss. The Russell 2000 had risen 1.1% but was lower by 0.9% for the week.
“Stocks rise and fall in various sectors as the impact of AI waxes and wanes,” writes Louis Navellier of Navellier & Associates, noting that software has been “roasted,” while hardware has soared then pulled back, as markets reprice tech stocks and other names connected to artificial intelligence (AI).
Meanwhile, timing around the impact of the “most profound technology ever invented” is uncertain, as is where the biggest inroads will be made and when return on investment will be realized.
Today, utility stocks were the best-performing sector, as the build out of data centers and the build up of demand for electricity to power them continues.
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“The trend remains positive,” Navellier concludes. “The economy is strong, inflation is tame, and interest rates are finally trending lower. The AI theme is very much alive and points to improving profit margins, albeit with questions regarding job displacement.”
Indeed, the January Consumer Price Index (CPI) report shows inflation slowed. And the January jobs report shows hiring sizzled to start the year.
Highlights of next week’s economic calendar include the minutes of the January Federal Open Market Committee (FOMC) meeting and the Fed’s preferred inflation gauge.
Note that Monday is a stock market holiday, with the stock and bond markets closed in observance of Presidents Day.
Yes, nukes
Cameco (CCJ, -2.9%), one of five stocks to buy for a Trump presidency, confirmed that and more this morning when the uranium producer reported better-than-expected fourth-quarter revenue and earnings.
“Across the nuclear industry,” CEO Tim Gitzel said in a statement announcing Cameco’s results, “2025 marked another year of accelerating global momentum.”
The CEO cited renewed commitments to nuclear energy from governments, utilities and industrial energy users around the world, a list that includes the four executive orders President Donald Trump signed in May to accelerate development of nuclear power in the U.S.
Indeed, CCJ stock was down today, but is up more than 130% over the trailing 12 months. And it remains a good way to invest in the nuclear revolution.
Upgrades lift RIVN stock
Rivian Automotive (RIVN, +26.6%), for what it’s worth, was one of five stocks to buy for a Harris presidency, though price action suggests it’s built for both kinds of administrations.
RIVN, which reported fourth-quarter earnings on Friday, generated a total return of 39.6% from October 21, 2024, through Thursday, outpacing the S&P 500 at 18.7%.
The electric vehicle maker reported fourth-quarter gross profit of $120 million on revenue of $1.3 billion, ahead of a Wall Street forecast for a breakeven bottom line on $1.2 billion in sales.
UBS analyst Joseph Spak upgraded RIVN stock to Hold from Sell and raised his 12-month target price to $16 from $15, while Deutsche Bank analyst Edison Yu raised his rating from Hold to Buy and upped his 12-month target price to $23 from $16.