US Markets Close: Trump Fed Chair Speculation, Small Caps Outperform, AI Chip Demand

Market Performance and Fed Speculation

• 📉 Markets experienced a soft day and week, with the S&P 500 struggling despite a rally in chipmakers, finishing lower for the week.
• 📈 Small caps continued their strong performance, with the Russell 2000 outperforming the US equity benchmark for an 11th consecutive session, a streak not seen since before the 1980s.
• ⚠️ Hopes for a buoyant day were deflated by concerns that President Trump is cooling on his preferred candidate for the Federal Reserve Chair, impacting Treasury yields.
• 📊 Treasuries dropped across the curve as traders dialed back expectations for Fed rate cuts this year.

Sector and Individual Stock Highlights

• 💡 Semiconductors showed outperformance, with ASML up about 2% as analysts see a potential 70% rally ahead due to soaring demand for artificial intelligence.
• 🚀 Mobile shares soared by 14% after securing a prime contract position for the US Missile Defense Agency's shield program.
• 🔬 ImmunityBio extended its advance for an 11th straight session, rising nearly 40% on positive efficacy results from a clinical cancer trial.
• ⚡ GE Vernova was a notable gainer, up more than 6%, as President Trump moved to make tech giants pay for surging power costs, potentially benefiting turbine makers.

Losers and Industry Trends

• 📉 Constellation Energy Group was the worst performer in the S&P 500, down 9.8%, as the White House's energy cost initiative could lower prices for power generation companies.
• fertilizers, reporting a significant decline in North American demand.
• 🏈 DraftKings and Flutter Entertainment fell due to a reported revenue decline in online sports gambling during the NFL's wild card weekend.

Broader Economic and Social Trends

• 🎓 A Bloomberg Quicktake story highlighted the implications of a plunging US birthrate on the higher education industry, leading to fewer students and potential school closures.
• 🏦 Bitcoin remained strong, trading well above $95,000, despite questions about support from Coinbase and its CEO.
• 🗓️ The upcoming week is anticipated to be significant with several earnings reports, the President's attendance at Davos, and a key Supreme Court opinion on a Fed governorship.