Stocks closed mostly lower on Friday in uneven trade. The S&P eked out a 0.03% gain, while the Nasdaq was up 0.28%. On the downside was the Dow, which gave up -0.58%, with the small-cap Russell 2000 and mid-cap S&P 400 falling by -1.82% and -1.00% respectively.

But all of the major indexes closed lower for the week, albeit not by much.

At the start of last week, tensions over U.S. interest in Greenland, and the threat of a 10% tariff on NATO countries who opposed it, weighed on stocks at the beginning of the week. But by mid-week, stocks bounced back after President Trump said he "won't use force" on Greenland. And following an announcement that a "framework of a future deal" over Greenland was reached, he said he would "not be imposing the tariffs that were scheduled to go into effect on February 1^st."

Supporting the rebound was a better-than-expected third and final estimate for Q3'25 GDP, which came in at 4.4%, up from last month's 4.3%, and the original estimate of 3.2%. (Not to mention Q4'25 is forecast at an even stronger 5.4%.)

And the latest Personal Consumption Expenditures (PCE) index (for November) showed core inflation (ex-food & energy) easing to 2.8% y/y vs. October's 2.9% and September's 3.0%.

Earnings season is also off to a strong start. And it picks up steam this week with more than 480 companies on deck to report, including 4 of the Magnificent 7 stocks (Microsoft, Meta and Tesla on Wednesday 1/28, and Apple on Thursday 1/29), along with other widely held names like Texas Instruments, Starbucks, Visa, Exxon Mobile and IBM throughout the week.

Earnings season is always an exciting time since stocks typically go up during earnings season.

But we could see more volatility after President Trump said he would impose a 100% tariff on Canadian goods if Canada signs a deal with China that the U.S. believes could result in a "drop-off port" for Chinese goods to make their way to the U.S. and bypass their tariffs.

In other news, on Wednesday, 1/28, we'll hear from the Fed on interest rates. Nobody is expecting a cut this month (only 4.4% odds). But the likelihood increases to 15.4% in March, 29.4% in April, and 60.6% in June (when the new Fed Chair is expected to replace current Chair Jerome Powell after his term expires in May). But you can be sure everybody will be listening to Mr. Powell's Press Conference afterwards for insight on the Fed's outlook on inflation, economic growth and future rate cuts.

Three weeks into the new year and the markets are off to a good start. YTD, the Dow is up 2.15%; the S&P is up 1.02%; the Nasdaq is up 1.12%; the Russell 2000 is up 7.54%; and the S&P 400 is up 5.49%. It's also interesting to note that the equal-weighted S&P 500 index is up 3.71% vs. the market-weighted 1.02%, showing the strength of smaller-cap names (in this case upper mid-cap names), vs. the larger- and mega-caps. A couple percent isn't huge. But combined with the outsized performance of the small and mid-cap indexes, it shows the broadening of the rally, which is a bullish sign.

See you tomorrow,