WEEK IN PERSPECTIVE: Week ending January 9, 2025

Cyclical leadership anchors broad push to record highs

U.S. equities powered higher this week, extending their strong start to 2026 as the S&P 500 and DJIA logged multiple record highs. Investors leaned decisively into cyclical and economically sensitive areas, while mega-cap tech rejoined the rally selectively toward week’s end.

🔥 Major Index Performance

Broad strength defined the week, but small caps stole the spotlight.

Index	Weekly Return
Russell 2000	+4.6%
S&P Mid Cap 400	+3.3%
DJIA	+2.3%
Nasdaq Composite	+1.9%
S&P 500	+1.6%

Smaller-cap stocks continued their early-year leadership as investors embraced domestic growth exposure.

🚀 Sector & Style Trends

The market’s tone was unmistakably pro‑cyclical.

Standout Sectors

• Consumer Discretionary (+5.8%) – Homebuilders and retailers led the charge.

• Materials (+4.8%) – Metals and mining names surged.

• Industrials (+2.5%) – Infrastructure and defense optimism boosted the group.

• Energy (+2.1%) – Volatility around Venezuela and shifting oil-supply expectations supported gains.

Laggard

• Utilities (‑1.6%) – The lone declining sector as investors rotated out of defensive positioning.

💻 Tech Check: A Mixed Picture

The information technology sector finished flat, but that masked significant internal dispersion.

• Semiconductors shined, with the PHLX Semiconductor ETF up +3.7%, fueled by renewed enthusiasm for AI infrastructure—especially memory and chip manufacturing.

• Mega-cap growth was uneven, leaving the Vanguard Mega Cap Growth ETF up a modest +0.9% despite late-week strength from select leaders.

🎯 Thematic Movers

Several thematic groups reinforced the cyclical tilt:

• Home Construction (ITB +9.7%) – Strong housing data and supportive mortgage policy drove a breakout.

• Aerospace & Defense (ITA +4.9%) – Gains followed President Trump’s call for increased military spending and rising geopolitical tensions.

• Retail (XRT +4.9%) – Benefited from improving growth sentiment and stock-specific catalysts.

🧭 Macro Backdrop

Economic data supported risk appetite without disrupting the rally.

• December jobs report: Softer payrolls but lower unemployment eased fears of a consumer slowdown and supported expectations for a patient Fed.

• Productivity and services data: Continued to point toward steady economic growth with limited inflation pressure.

📌 Bottom Line

The first full trading week of 2026 showcased a market growing more confident in the economic outlook. Leadership broadened beyond mega-cap tech, small and mid caps took the early lead, and cyclical sectors reasserted themselves.

With inflation data and earnings season on deck, the coming weeks will test this momentum—but for now, the market enters with a strong tailwind.

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