Stocks fell for the second consecutive week as a round of fresh economic data stoked inflationary fears among investors.

The Standard & Poor’s 500 Index declined 1.94 percent, while the Nasdaq Composite Index dropped 2.34 percent. The Dow Jones Industrial Average lost 1.86 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, slipped 0.49 percent.^1,2

Inflation Stymies Markets

Stocks rallied broadly to start the week, but two economic reports on Tuesday—job openings and the prices-paid index among service companies—raised fresh inflation concerns. Higher Treasury yields also put pressure on stocks.^3,4

Stocks flattened out on Wednesday. Investors reacted to news that most Federal Open Market Committee members agreed inflation risks had increased, per minutes from the Fed’s December meeting.^5,6

U.S. stock markets were closed Thursday in observance of President Jimmy Carter’s funeral.

On Friday, a warmer-than-expected December jobs report caused investors to question whether the Fed will adjust rates in 2025. News that consumer sentiment ticked down also pushed stocks lower.⁷

When Good Becomes Bad News

The economy added 256,000 jobs in December—100,000 more than economists expected. That’s the second-highest monthly job gain for 2024. Unemployment ticked down to 4.1 percent, which was also better than anticipated.

Job growth and lower unemployment signals good news for the economy but bad news for the markets. A stronger jobs market puts less pressure on the Fed to adjust rates, especially with inflation top-of-mind among investors.^8,9

This Week: Key Economic Data

Monday: Treasury Statement.

Tuesday: Producer Price Index. Fed officials Jeffrey Schmid and John Williams speak.

Wednesday: Consumer Price Index. Fed officials Thomas Barkin, Neel Kashkari, John Williams, and Austan Goolsbee speak. Fed Beige Book.

Thursday: Retail Sales. Import and Export Prices. Business Inventories. Homebuilder Confidence Index.

Friday: Housing Starts and Permits. Industrial Production.

^{Source: Investors Business Daily – Econoday economic calendar; January 9, 2025
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.}

This Week: Companies Reporting Earnings

Wednesday: JPMorgan Chase & Co. (JPM), Wells Fargo & Company (WFC), BlackRock, Inc. (BLK), Citigroup Inc. (C), The Charles Schwab Corporation (SCHW)

Thursday: UnitedHealth Group Incorporated (UNH), Bank of America Corporation (BAC), Morgan Stanley (MS)

^{Source: Zacks, January 9, 2025. Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.}

“The very least you can do in your life is to figure out what you hope for. And the most you can do is live inside that hope. Not admire it from a distance but live right in it, under its roof.”

– Barbara Kingsolver

Self-Employed Tax Obligations

There are a few tax considerations to consider when you work for yourself. Generally, you’re required to file and pay estimated taxes during the year.

• Make quarterly payments if you’ve determined you need to use Form 11040-ES.
• Filing annually: If you’re filing annually, you must use Schedule C to report income or loss. To file your Social Security and Medicare taxes, you should file Schedule SE Form 1040.
• Deductions: If you’re using part of your home for business, you may be able to make certain deductions, such as for your office or a portion of your home’s square footage used for business purposes.

This information is not a substitute for individualized tax advice. Please discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS¹⁰

Restorative Yoga: Long and Easy Stretching

Whether you have been curious about yoga but have never tried it, or if you’re a seasoned yogi looking for something new, restorative yoga has something for everyone. This gentle yoga uses props like blocks, blankets, and straps. Stretches and poses are held for a longer time, yielding many benefits. Here are a few ways that restorative yoga can be beneficial for many people:

• It can help with neck, lower back, hip, and shoulder pain
• It can help with insomnia
• All ages widely practice it, and modifications are available
• It can relax the mind and help with anxiety
• It may help to cope with serious illnesses and life events
• It may improve respiratory and circulatory function

Check your local yoga studios or gyms to enroll in a restorative yoga class. If you can’t find one, there are online yoga courses you can try. It might be a stretch worth taking (ask your doctor if yoga might be right for you).

Tip adapted from Mindbodygreen.com¹¹

Dave is at the hardware store to buy something for his house. Yesterday, he bought 1 for $1. The week before, he purchased 10 for $2, and his friend bought 100 for $3. Today, he bought 907 for $3. If the prices haven’t changed, how is this possible?

Last week’s riddle: David put on a white shirt with three large holes in it and went to the grocery store. No one gave him a funny look; no one objected to it. What kind of shirt was David wearing? Answer: A white t-shirt (the holes were the collar and sleeves of the shirt)

Surprise Glacier

Prince William Sound, Alaska

Stocks edged lower last week despite a powerful end-of-week rally.

The Standard & Poor’s 500 Index lost 0.48 percent, while the Nasdaq Composite Index slid 0.51 percent. The Dow Jones Industrial Average fell 0.60 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, dropped 0.90 percent.^1,2

Selling Then Buying

Stocks were under pressure right out of the gate on Monday for no apparent reason other than worries over the loss of year-end momentum. By the end of trading on Monday, markets recovered some losses, but the selling picked up again on Tuesday.^3,4

After being closed for the New Year’s holiday, stocks opened higher for the first trading day of 2025. But sellers gained the upper hand by the end of trading. On Friday, Investors perked up with tech stocks leading a recovery rally that erased most of the week’s losses.^5,6

Megacap’s Mega Influence

Megacap tech stocks have captured many headlines over the last two years as the S&P 500 posted double-digit returns (24 percent for 2023 and 23 percent for 2024).

And for a good reason—megacap tech stocks were doing most of the work. For example, during the past 12 months of trading, more than half (53 percent) of the S&P 500’s return can be attributed to the Magnificent Seven–the seven megacap tech companies that most investors would consider household names.⁷

This Week: Key Economic Data

Monday: Fed Official Lisa Cook speaks. Factory Orders.

Tuesday: Fed Official Thomas Barkin speaks. International Trade in Goods and Services.

Wednesday: FOMC Minutes released. ADP Employment Report. Fed Official Christopher Waller speaks.

Thursday: Stock market closed for President Carter’s state funeral.

Friday: Employment Situation. Consumer Sentiment.

^{Source: Investors Business Daily – Econoday economic calendar; January 3, 2025
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.}

This Week: Companies Reporting Earnings

Wednesday: Jefferies Financial Group Inc. (JEF)

Thursday: Infosys (INFY), Constellation Brands Inc. (STZ)

Friday: Bank of America Corporation (BAC), Wells Fargo & Company (WFC), BlackRock, Inc. (BLK), Delta Air Lines, Inc. (DAL)

^{Source: Zacks, January 3, 2025. Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.}

“The biggest disease today is not leprosy or tuberculosis, but rather the feeling of being unwanted.”

– Mother Teresa

Tips for Good Recordkeeping

When you file your tax return, the first step is to prepare your records. Good recordkeeping throughout the year can make filing your taxes easier. 

Here are some recordkeeping tips:

• Identify all sources of income.
• Keep track of expenses.
• Add tax records to your files as you receive them to make filing easier. 
• Organize support items that you may need to clarify your tax return. 

This information is not a substitute for individualized tax advice. Please discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS⁸

How to Drink More Water Throughout the Day

Drinking enough water is essential to keep you feeling your best. While there aren’t any strict rules on exactly how much water you should drink, you should listen to your body to ensure you’re getting enough. 

Here are some tips on how to drink more water throughout the day:

• Keep a reusable water bottle with you, saving plastic and making drinking water more convenient (and fun). 
• Set reminders on your phone to drink water, or “anchor” drinking water to other habits throughout your day (for example, drink some water at the end of every meeting).
• Replace other drinks, such as coffee and soda, with water.
• Drink a glass of water before every meal.
• Flavor your water with fruit or healthy water enhancers.

Tip adapted from Healthline⁹

David put on a white shirt with three large holes in it and went to the grocery store. No one gave him a funny look; no one objected to it. What kind of shirt was David wearing?

Last week’s riddle: Throughout Friday, Hanna asks her mother the same four-word question. On each occasion, her mother gives her a different answer. What is the question?
Answer: “What time is it?”

Surfing Pulau Panaitan

Jakarta, Banten, Indonesia

Footnotes and Sources

^{1. The Wall Street Journal, January 3, 2025}

^{2. Investing.com, January 3, 2025}

^{3. CNBC.com, December 30, 2024}

^{4. The Wall Street Journal, December 31, 2024}

^{5. CNBC.com, January 2, 2025}

^{6. CNBC.com, January 3, 2025}

^{7.  The Wall Street Journal, December 31, 2024}

^{8. IRS.gov, October 2, 2024}

^{9. Healthline, October 3, 2024}