On Friday, major US stock indices closed lower, although the S&P 500 had earlier reached a significant milestone, soaring to an intraday high of 6128.18 points, marking a historic peakThis week, the Dow Jones Industrial Average and the S&P 500 both recorded gains of 2.15% and 1.74%, respectively, while the tech-heavy Nasdaq Composite climbed by 1.65%. This marks the second consecutive week of upward momentum for all three indices, suggesting a resilient market despite recent fluctuations.

As the trading week concluded, the Dow Jones saw a decline of 140.82 points, closing down by 0.32% at 44424.25 pointsThe Nasdaq fell by 99.38 points, translating to a 0.50% drop, concluding at 19954.30. Meanwhile, the S&P 500 lost 17.47 points, a 0.29% dip, closing at 6101.24. These declines reflect a complex interplay of market dynamics, including investor sentiment and economic indicators influencing stock valuations across sectors.

In European markets, there was a mixed response from major indicesThe German DAX30 index edged down by 0.1%, and the UK's FTSE 100 fell by 0.75%. Conversely, France's CAC40 index managed to rise by 0.44%, while the Euro Stoxx 50 index recorded a marginal gain of 0.03%. This divergence emphasizes the variable nature of market movements across international landscapes, with investors reacting to local economic data and broader global trends.

Turning to the Asia-Pacific region, the Nikkei 225 index in Japan experienced a slight decline, while the Jakarta Composite Index in Indonesia dropped by 0.92%. On a positive note, South Korea's KOSPI index saw an increase of 0.85%, highlighting the continued volatility and investor interest in these markets as they navigate both domestic and international economic conditions.

In precious metals, gold displayed considerable strength, with spot gold prices rising by 0.61% to reach $2771.66 per ounceAt one point, gold prices soared to $2786.01, just shy of the historical peak of $2790.10 established on October 31, 2024. This weekly performance marks a cumulative increase of 2.52%, continuing an upward trajectory amid a complex economic backdrop

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Similarly, COMEX gold futures rose by 0.46%, closing at $2777.60 per ounceAfter reaching $2826.30 on October 30, the prices experienced fluctuations, dipping to $2715.60 earlier in the week before rallying to a peak of $2794.80 on Friday.

On the energy front, West Texas Intermediate (WTI) crude oil futures for March delivery increased marginally by 4 cents, settling at $74.66 per barrel, up by 0.05%. In contrast, Brent crude futures for March delivery edged up by 21 cents to close at $78.50 per barrel, an increase of 0.27%. The fluctuations in oil prices reflect ongoing negotiations in global markets, including geopolitical factors and supply-demand dynamics that affect oil production and consumption rates worldwide.

From a macroeconomic perspective, recent data has shed light on the pace of U.S. business activity, indicating a slowdown that has not been seen in nine monthsThe deceleration is primarily attributed to a cooling growth rate in the services sector, as evidenced by the S&P Global’s Composite Output Index dipping by 3 points to 52.4. A reading above 50 indicates expansion; therefore, while the overall trend remains positive, the momentum is waningAdditionally, the preliminary index for U.S. services activity dropped by 4 points, highlighting a significant moderation in growth after reaching its highest level since March 2022 last monthDespite these headwinds, optimistic projections for future demand have bolstered business sentiment to its best level since May 2022, driven by the anticipation of further pro-business policies from the government.

Additionally, U.S. existing home sales showed signs of recovery in December, marking the third consecutive monthly increaseHowever, the market overall still registered its weakest annual performance since 1995. The National Association of Realtors reported a 2.2% uptick in December home sales, translating to an annualized rate of 4.24 million units – the highest since February

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This consistent growth in monthly data suggests a stabilization after a turbulent year, as potential homebuyers appear to be acclimating to the current mortgage rates hovering around 7%. Lawrence Yun, Chief Economist at NAR, remarked on the resilience of the housing market, indicating that despite the challenging lending environment, there is a notable rebound in sales as the year closes.

Meanwhile, shifts in the U.STreasury Department's cash reserves have raised concerns among strategists regarding potential impacts on the bond marketReports indicate that changes in Treasury leadership could affect how cash held at the Federal Reserve is managed, leading to a reduction in cash balances that serve as a buffer for government operationsAnalysts from major financial institutions, including Bank of America and Wrightson ICAP LLC, have posited that a declining cash balance may prompt the Treasury to issue fewer short-term bonds, ultimately saving taxpayer dollars amid a context of reduced cash reserves and a reinstated debt ceilingThe expectation is that the Treasury's cash position will continue to diminish before the debt ceiling is lifted or paused.

On an individual stock basis, Apple Inc. has encountered a disappointing start to 2025, reflecting the company’s most challenging beginning to a year since 2008. The stock is perilously close to a critical technical level, where a break below could signal further declines in the futureAs of Thursday's close, Apple shares had sank by 11% year-to-date, the worst performance among the seven largest tech firmsThis stark underperformance is compounded by the broader S&P 500 index's 4% increase, indicating a significant market shift toward other componentsBloomberg’s analysis revealed that Apple is experiencing its most challenging quarterly start since 2008. The current downward trajectory has left the stock just a few dollars shy of its 200-day moving average, a key long-term support levelTodd Sohn, a strategist at Strategas Securities, remarked on the critical nature of this level, emphasizing that as stocks approach or breach it, investor confidence in the upward trend often erodes, leading to potential further declines.

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