U.S. Stocks Bounce Back Amid Market Optimism

U.S. stocks rebounded, closing higher as expectations of Federal Reserve rate cuts and looser regulatory policies grew. Despite the uptick, weekly losses were recorded. The economic outlook remains positive with robust data, while upcoming Trump administration policies may influence inflation. Key industry stocks showed mixed responses in a light-volume market.

U.S. stocks made a strong comeback on Friday as investors navigated the end of a holiday-shortened week that kicked off the new year. The rise in stock indices was driven by hopes of Federal Reserve rate cuts and relaxed regulatory measures from the incoming administration, propelling the Nasdaq forward.

Despite the positive close, all three major indexes logged modest declines over the week, with the S&P 500 experiencing its third loss in four weeks. This came after a series of down days that capped off a remarkable year powered by advancements in artificial intelligence and significant policy rate deductions by the Federal Reserve.

According to Ryan Detrick, chief market strategist at Carson Group, after weeks of bearish pressure, light trading created a ripe environment for buyers. As the new Congress settled in and President-elect Donald Trump prepared to assume office, economic indicators and proposed policies continued to play a significant role in market expectations.

(With inputs from agencies.)