US market weekly: S&P 500 ends higher amid weakened Omicron fears and multi-decade high inflation.

Last updated:

U.S. stocks closed sharply higher on Monday to start the week on a high, with economically sensitive stocks rallying as investors shed fears of the Omicron variant. The Dow recorded its biggest daily point gain in more than a year erasing its last week’s losses. All the three major indexes ended in positive territory.

U.S. stocks closed higher for the second consecutive session on Tuesday as investors shrugged off fears of the Omicron variant after reports suggested that the mutant is less severe than originally thought. The rally was driven by tech stocks. All the three major indexes ended in positive territory.

U.S. stocks closed slightly higher on Wednesday, with major indexes hovering around their record highs, as vaccine makers said that laboratory tests show that the variant gets neutralized with a third dose of their COVID-19 vaccine. All the three major indexes ended in positive territory.

US indices closed mostly lower on Thursday, ending a mixed trading session that followed record-low initial jobless claims. Investors mostly shrugged off jobs data as they pivot their attention to this month's Consumer Price Index report as worries about stickier levels of inflation heighten.

Stocks ended at a record level on Friday as investors shrugged off a key inflation report ahead of the Fed's final policy-setting meeting of the year next week. The Consumer Price Index (CPI) showed yet another multi-decade high rate of inflation to 6.8% for November. The S&P 500 posted a weekly gain of 3.8% and Nasdaq overperformed with a weekly gain of 3.6%.

Weekly market stats with IND

UW-04 (7).jpg

Let’s see the major developments during the week:

Easing Omicron worries: The S&P 500 Index recorded its best weekly gain since February, as fears seemed to abate about the new omicron variant of the coronavirus. The spread of the existing delta variant appears to have again picked up though economic progress is coming back on track. An average of 1.19 lakh coronavirus cases have been reported each day in the United States while the total cases have crossed the 49.2 million mark.

Weekly Jobs Report: The Labor Dept reported that 184,000 Americans applied for unemployment benefits the previous week—the lowest number since 1969. The number of open jobs in the U.S. also rose much more than expected to a record 11 million, with most of the gains coming in accommodation and food services.

Inflation at multi-decade high: The Labor Department's Consumer Price Index (CPI) showed yet another multi-decade high rate of inflation for November. The CPI climbed by 6.8% in Nov compared to last year, marking the fastest annual increase since June 1982. While rising energy costs deserved part of the blame, price increases were broadly due to the core rate, excluding food and energy, which rose 4.9% suggesting wage pressures alongside supply chain issues. However, both increases were roughly in line with expectations.

Oil Markets: Oil prices rose slightly on Friday and posted their biggest weekly gain since late August, with market sentiment buoyed by easing concerns over the Omicron variant's impact on global economic growth and fuel demand. The Brent and U.S. West Texas Intermediate (WTI) crude benchmarks each posted gains of about 8% this week.