Search

Key Sector News for US Stock Investors - January 22, 2025

Market Summary

On January 22, 2025, US markets closed higher as investors anticipated executive orders and trade policy announcements following President Donald Trump's inauguration. The Dow Jones Industrial Average rose 0.91% to 43,884.16, the S&P 500 gained 0.48% to 6,025.61, and the Nasdaq Composite increased 1.5% to 19,630.20. The small-cap focused Russell 2000 index hit a one-month high, rising 1.5%. While President Trump did not specify plans for universal tariffs or additional tariffs on major trading partners, he mentioned considering tariffs on Canadian and Mexican goods starting February 1st. Last week, the S&P 500 and Dow Jones indices recorded their biggest weekly gains since early November, supported by strong bank earnings and signs of slowing core inflation. However, inflation remains above the Fed's 2% target, and concerns have been raised that Trump's policies could slow the pace of Fed monetary policy easing. Economists expect the Fed to hold rates steady at next week's meeting, while traders anticipate the first rate cut in July.

Global Market Impact

Asian markets showed mixed performance due to increased uncertainty from Trump's tariff comments. European markets opened higher, with France's CAC 40 up 0.7% and Germany's DAX up 1%. Meanwhile, New Zealand's inflation remains subdued due to continued economic recession and high unemployment, with possibilities of a 75bp rate cut by the New Zealand central bank next month. These global monetary policy changes could impact US markets. The dollar has maintained its upward trend since last October due to Trump's strong dollar policy stance, expectations for US economic growth, and potential rate hikes. Since Trump's inauguration, the dollar has risen 10% against G10 currencies, reaching multi-year highs against the pound and Canadian dollar. It hit record highs against emerging market currencies like the Brazilian real and Indian rupee. However, some experts suggest dollar strength may be excessive and due for correction.
By sector, energy led with a 9.7% year-to-date gain. The IT sector outperformed the S&P 500's 2024 returns, driven by AI-related stocks. In contrast, the retail/consumer goods sector showed declining consumer spending amid economic slowdown concerns. Notably, Indian markets showed distinct performance differences between large and small caps. The large-cap focused Sensex index rose while small-cap indices declined. The IT sector led gains, with strong performances from Wipro, Infosys, and TCS.
Index
Change on Jan 22, 2025 (%)
Key Drivers
S&P 500
1.0
Strong bank earnings, slowing core inflation
Dow Jones
0.8
Expectations for Trump executive orders
Nasdaq
1.5
Tech stock strength
Russell 2000
1.5
Small-cap strength

Key Sector News

Tech Sector

•
Big Tech Earnings: Big tech companies exceeded market expectations with strong earnings. Netflix recorded its highest quarterly subscriber growth ever, driven by streaming service expansion and live program introduction. Netflix achieved high viewership through content like 'Squid Game 2', movie 'Carry On', Jake Paul vs Mike Tyson fight, and Christmas NFL games, and is expected to continue growth through expansion into video games, live streaming, and advertising.
•
AI Infrastructure Investment: Major tech companies including OpenAI, SoftBank, and Oracle plan to invest up to $500 billion in "Stargate", a joint venture for AI infrastructure development in the US. This is raising expectations for AI technology advancement and industry growth.
•
Wearables Market Growth: The wearable sensors and actuators market is growing rapidly driven by increased demand for health monitoring, fitness tracking, and augmented reality (AR) applications. Key products include smartwatches, fitness bands, and wireless earphones, with pressure sensors, inertial measurement units (IMUs), and microphones as core components.
•
China's Patent Competitiveness: China shows continued growth in US patent acquisitions, particularly rapid development in sustainability. This indicates intensifying US-China tech competition.
•
Trump Coin: President Donald Trump's official meme coin $TRUMP maintains an $8 billion market cap showing stability. The popularity of meme coins demonstrates the speculative nature of the crypto market.

Healthcare Sector

•
Medical Tubing Market Growth: The medical tubing market is expected to reach $23.55 billion by 2031, driven by smart technology integration and increased demand. Medical tubes are used in fluid management, drainage, anesthesia, respiratory equipment, IVs, catheters, peristaltic pumps, dialysis, feeding tubes, and biopharmaceutical production.
•
Urgent Care App Market Expansion: The urgent care app market is projected to reach $25.23 billion by 2030, driven by increased internet and smartphone penetration and demand for patient-centered healthcare services. Urgent care apps offer benefits like affordable healthcare, convenient access, regular follow-ups, and reduced wait times, with government support and investment contributing to market growth.
•
Abbott Laboratories Earnings: Abbott Laboratories reported a 12.61% year-over-year increase in earnings per share for Q4 2024, driven by steady growth in medical devices and diagnostics.
•
Needle-free Blood Draw Device: Carilion Clinic partnered with BD to introduce Virginia's first needle-free blood draw device, BD PIVO Pro, reducing patient pain and anxiety while decreasing needlestick injury risks for healthcare workers.
•
Healthcare Supply Chain Research: Professor Amir Karimi at the University of Texas at San Antonio (UTSA) is conducting research to improve access to essential medical products in low and middle-income countries. Supply chain improvements can contribute to better healthcare quality and cost reduction.

Financial Sector

•
Merchant Acquisition Solutions: Highnote raised $90 million in Series B funding to innovate merchant acquisition solutions in the US. Highnote operates a platform that provides both card issuance and acquisition capabilities, enabling improved efficiency and cost reduction.
•
Bank Efficiency Improvement: According to a report by Nasdaq and Boston Consulting Group (BCG), improving banks' risk and compliance functions can increase efficiency and achieve cost savings of up to $50 billion. This can contribute to improving financial institutions' profitability.
•
Nature-Related Financial Disclosures: The Rockefeller Foundation provided $500,000 to support the Task Force on Nature-related Financial Disclosures (TNFD) to establish market practices for corporate nature-related risk reporting. This will help strengthen corporate sustainability efforts.
•
OTC Markets Group Indices: OTC Markets Group announced quarterly index performance and rebalancing results. Investors should be mindful of OTC market volatility.
•
Climate Change Response: UN Secretary-General António Guterres emphasized the role of financial institutions in addressing climate change during a special address at the World Economic Forum (WEF). Financial institutions need to actively participate in climate change-related investment and risk management.

Energy Sector

•
Energy Sector Strength: The energy sector has led the market with a 9.7% gain since 2025. The Vanguard Energy ETF offers investors an attractive investment option with a 3.2% dividend yield and low 0.1% management fee. Energy companies like ExxonMobil, Chevron, and ConocoPhillips are recording low price-to-earnings ratios (PER) and high dividend yields.
•
US Energy Industry Trends: The US energy industry is experiencing various changes including LNG project boom, increased shale oil and gas production, and expanded renewable energy investment. Key trends include increased LNG demand, advanced technology adoption, overseas oil field development, and growing energy demand.
•
Ohio Energy Policy: Ohio plans to create a consumer-focused energy market and promote innovation through energy policy reform. By improving energy policy focused on transparency, competition, and innovation, it is expected to provide consumers with more choices and reduce energy costs.
•
California Renewable Energy Support: California is pursuing legislation to replace the federal clean energy tax credit program discontinued by the Trump administration. This is expected to have a positive impact on renewable energy industry growth.
•
Oil Price Increase: US West Texas Intermediate (WTI) crude oil prices surpassed $80 per barrel due to Russian sanctions. While rising oil prices can contribute to improved profitability for energy companies, these effects may be limited if demand decreases due to economic slowdown.

Retail/Consumer Goods Sector

•
Consumer Spending and Debt Increase: While consumer spending increased during the 2024 Black Friday/Cyber Monday (BFCM) period, rising US credit card debt is raising concerns about consumer sentiment. Consumers continue purchasing through installment plans, but credit card debt reached a record high of $1.17 trillion in Q3 2024.
•
Consumer Goods Companies' Challenges: Consumer goods companies are facing difficulties due to lack of collaboration among financial officers, negatively impacting cash flow predictability and operational results. They need to improve financial performance by leveraging financial officers' expertise and strengthening collaboration.
•
P&G Sales Volume Growth: P&G's organic sales increased 3% year-over-year in Q4 2024, driven by volume growth rather than price increases. Consumers are showing preference for bulk products or premium products, and P&G continues growth through innovative product development. President Trump's price stability policy may act as a factor restraining companies' price increases.
•
UK Consumer Spending Decline: UK consumer spending is declining, which is expected to negatively impact retailers' performance. Retailers need to strengthen competitiveness by responding to changing consumer trends.

Investment Strategy

Positive Investment Opportunities

•
IT Sector: Growth in artificial intelligence (AI) technology and related companies is expected to continue. The Vanguard IT ETF (VGT) has consistently outperformed the S&P 500 index over the past 20 years and has a high proportion of AI-related stocks, suggesting potential for high returns going forward. Companies leading in AI hardware and software like NVIDIA, Apple, Microsoft, and Broadcom are particularly attractive investment opportunities.
•
Small and Mid-Cap Stocks: Carson Group rates small and mid-cap stocks as having higher growth potential than large caps. The financial and industrial sectors also show positive outlooks, with expectations for 20%+ returns in 2025 not just in IT but also in financial, utility and telecom services sectors.
Individual Companies:
•
Intermediate Capital (ICG): Raised $22 billion over 12 months, doubling from 2023. Fee-earning assets under management (AUM) increased 2% quarter-over-quarter to $208 billion. Fund management scale increased 11% year-over-year to $81 billion, with a low debt ratio of 27%. ICG is expected to see continued growth based on its defensive portfolio and resilience in recessionary environments.
•
ASML: The semiconductor equipment manufacturer is expected to record Q1 2025 revenue of €6.7 billion, up 10% year-over-year. This is driven by increased AI chip demand and expanded investment from major customers like TSMC and Samsung Electronics. ASML monopolizes the extreme ultraviolet (EUV) lithography equipment market and offers strong long-term investment value based on its technological capabilities and growth potential.

Investment Considerations

•
Interest Rate Hikes: Potential Fed rate hikes could increase market volatility. Higher rates can increase corporate borrowing costs and dampen consumer sentiment, potentially slowing economic growth. Close monitoring of Fed announcements and economic indicators regarding rate timing is essential.
•
Inflation: Persistent inflation can worsen corporate profitability and reduce consumer spending. Energy price increases in particular add to inflationary pressures. Inflation trends and government price stability policies require ongoing observation.
•
Trump Administration Policies: Trump administration trade and economic policies may create market uncertainty. Enhanced protectionism, fiscal policy changes, and deregulation can impact business activity and investor sentiment. Trump administration policy announcements and market reactions warrant close attention.
•
Chinese Economy: Chinese economic slowdown could negatively impact the global economy. As the world's second-largest economy and major trading partner for the US and other nations, Chinese economic indicators and policy changes need monitoring.

Sector Strategy

•
Tech Sector: Investing in high-growth areas like AI, cloud computing, and cybersecurity is advantageous. Big tech companies are expected to see continued growth based on solid performance and innovative technology.
•
Healthcare Sector: The healthcare sector has high long-term growth potential due to aging populations and medical technology advances. Leading companies in medical devices, pharmaceuticals, and biotech are expected to generate stable returns.
•
Financial Sector: Banks' profitability may improve during interest rate hikes. However, potential economic slowdown could negatively impact the financial sector. Investment strategies should consider financial regulations and economic indicators.
•
Energy Sector: Rising oil prices and increased importance of energy security are positive factors for the energy sector. However, renewable energy expansion and stricter environmental regulations could pose threats to traditional energy companies. Investment decisions should analyze energy market changes and companies' business strategies.
•
Retail/Consumer Goods Sector: Changes in consumer sentiment and intensifying competition create uncertainty in the retail/consumer goods sector. Companies that quickly respond to changing consumer trends and launch innovative products can secure competitive advantages.

Conclusion

The US stock market in 2025 presents an environment with both opportunities and risk factors. Investors should make careful investment decisions considering economic indicators, corporate performance, government policies, and global economic conditions comprehensively. It's important to invest in quality companies from a long-term perspective and manage risk through diversification.
Disclaimer: This material is prepared for informational purposes only and does not constitute investment advice. Investment decisions should be made under the investor's own judgment and responsibility.

References

1.
STOCK MARKET SNAPSHOT FOR 22/01/2025 | Hellenic Shipping News Worldwide, https://www.hellenicshippingnews.com/stock-market-snapshot-for-22-01-2025/
2.
How major US stock indexes fared Friday, 1/17/2025 | AP News, https://apnews.com/article/wall-street-stocks-dow-nasdaq-8eae6127081f115e4e841f743a0a5ea5
3.
Stock market today: Asian stocks are mixed as Trump's talk of tariffs raises uncertainty, https://www.clickondetroit.com/business/2025/01/22/stock-market-today-asian-stocks-mixed-as-trumps-tariff-threats-raise-uncertainty/
4.
Stock market today: World stocks are mixed as Trump's talk of tariffs raises uncertainty, https://www.news4jax.com/business/2025/01/22/stock-market-today-asian-stocks-mixed-as-trumps-tariff-threats-raise-uncertainty/
8.
Meet the High-Yield Vanguard ETF That's Already Up Nearly 10% in 2025 | The Motley Fool, https://www.fool.com/investing/2025/01/22/meet-high-yield-vanguard-etf-up-2025/
9.
Prediction: This Spectacular Vanguard ETF Will Crush the S&P 500 Again in 2025, https://www.fool.com/investing/2025/01/22/prediction-vanguard-etf-crush-sp-500-again-2025/
10.
Customer spending has dipped, shows ONS stats - CX Network, https://www.cxnetwork.com/cx-experience/news/customer-spending-has-dipped-shows-ons-stats
11.
Share Market Highlights 22 January 2025: Sensex, Nifty close higher, driven up by rally in IT blue-chips - The Hindu Business Line, https://www.thehindubusinessline.com/markets/stock-market-highlights-22-january-2025/article69124011.ece
12.
History Says the Nasdaq Will Soar in 2025. 1 Unstoppable Stock Is Surging Right Now., https://www.fool.com/investing/2025/01/22/history-says-the-nasdaq-will-soar-in-2025-1-unstop/
13.
Tech Companies to Invest $500B in AI Infrastructure Through Stargate JV - GovCon Wire, https://www.govconwire.com/2025/01/tech-companies-ai-infrastructure-investment-stargate-jv/
15.
Patent Data Reports Show China's Continued Gains, Rapid Advances in Sustainability, https://ipwatchdog.com/2025/01/22/patent-data-reports-show-chinas-continued-gains-rapid-advances-sustainability/id=185267/
16.
Latest Market News Today Live Updates January 22, 2025: Dixon Technologies: A flurry of acquisitions, collaborations, and capacity expansions - Mint, https://www.livemint.com/market/latest-markets-today-live-updates-january-22-2025-11737501974292.html
17.
Medical Tubing Market to Reach US$ 23.55 Billion by 2031, Driven by Smart Technology Integration and Growing Demand - GlobeNewswire, https://www.globenewswire.com/news-release/2025/01/22/3013389/0/en/Medical-Tubing-Market-to-Reach-US-23-55-Billion-by-2031-Driven-by-Smart-Technology-Integration-and-Growing-Demand.html
19.
Pre-Market Earnings Report for January 22, 2025 : PG, JNJ, ABT, APH, TRV, TEL, HAL, TDY, TXT, ALLY, CBSH, CMA | Nasdaq, https://www.nasdaq.com/articles/pre-market-earnings-report-january-22-2025-pg-jnj-abt-aph-trv-tel-hal-tdy-txt-ally-cbsh
20.
Carilion Clinic First in Virginia to Offer Needle-free In-patient Blood Draws, Redefining Patient Standard of Care, https://news.bd.com/2025-01-22-Carilion-Clinic-First-in-Virginia-to-Offer-Needle-free-In-patient-Blood-Draws,-Redefining-Patient-Standard-of-Care
21.
Faculty member Amir Karimi explores global health care supply chains | UTSA Today, https://www.utsa.edu/today/2025/01/story/amir-karimi-explores-health-care-supply-chains.html
22.
Highnote clinches $90m in Series B to revolutionise U.S. merchant acquiring, https://fintech.global/2025/01/22/highnote-clinches-90m-in-series-b-to-revolutionise-u-s-merchant-acquiring/
24.
Rockefeller Foundation Invests in TNFD's Efforts To Scale Adoption of Nature-Related Disclosure, https://www.rockefellerfoundation.org/news/rockefeller-foundation-invests-in-tnfds-efforts-to-scale-adoption-of-nature-related-disclosure/
26.
Secretary-General's Special Address at the World Economic Forum - the United Nations, https://www.un.org/sg/en/content/sg/statement/2025-01-22/secretary-generals-special-address-the-world-economic-forum
27.
US Energy & Utilities Industry Almanac 2025: Market Research, Statistics, Trends and Leading Companies - GlobeNewswire, https://www.globenewswire.com/news-release/2025/01/22/3013224/0/en/US-Energy-Utilities-Industry-Almanac-2025-Market-Research-Statistics-Trends-and-Leading-Companies.html
29.
California bill would replace Trump-targeted renewable energy tax incentives with state ones - E&E News by POLITICO, https://www.eenews.net/articles/california-bill-would-replace-trump-targeted-renewable-energy-tax-incentives-with-state-ones/
30.
Are ExxonMobil and Chevron the Best High-Yield Energy Stocks to Buy Now That Oil Just Topped $80 per Barrel? | The Motley Fool, https://www.fool.com/investing/2025/01/22/buy-exxonmobil-chevron-oil-dividend-stock/
32.
CPG Firms Missing Out as Treasurers Face Collaboration Barriers - PYMNTS.com, https://www.pymnts.com/consumer-finance/2025/cpg-firms-missing-out-as-treasurers-face-collaboration-barriers/
33.
P&G Sales Boosted by Shoppers 'Trading Up' - BNN Bloomberg, https://www.bnnbloomberg.ca/business/2025/01/22/pg-sales-boosted-by-shoppers-trading-up/
34.
Major fund manager reveals stock market forecast for 2025 - TheStreet, https://www.thestreet.com/markets/major-fund-manager-reveals-stock-market-forecast-for-2025
35.
Daily Stock Market Report (Wed 22 Jan 2025) - STB | Graham Neary - Stockopedia, https://www.stockopedia.com/content/daily-stock-market-report-wed-22-jan-2025-stb-1020994/
36.
This Cheap Stock Has Huge Market Beating Potential | The Motley Fool, https://www.fool.com/investing/2025/01/22/this-cheap-stock-has-huge-market-beating-potential/
37.
The rich and famous don't fear a stock market bubble. That's why you should. | Morningstar, https://www.morningstar.com/news/marketwatch/20250122199/the-rich-and-famous-dont-fear-a-stock-market-bubble-thats-why-you-should
38.
Nasdaq Report Identifies Between $25 Billion and $50 Billion in Potential Efficiency Gains in Banks' Risk and Compliance Functions, https://ir.nasdaq.com/news-releases/news-release-details/nasdaq-report-identifies-between-25-billion-and-50-billion
39.
Opinion: The Biggest Risk Facing Nvidia Stock, and How the Company Will Solve It, https://www.fool.com/investing/2025/01/22/opinion-biggest-risk-nvidia-stock-company-will-sol/
40.
Amid soaring US debt, can Trump balance fiscal challenges with campaign promises?, https://www.chathamhouse.org/2025/01/amid-soaring-us-debt-can-trump-balance-fiscal-challenges-campaign-promises
41.
2025 Economic Calendar, https://us.econoday.com/
42.
C-Suite Outlook 2025: What Risks Are Leaders Watching? - The Conference Board, https://www.conference-board.org/podcasts/c-suite-perspectives/C-Suite-Outlook-2025-What-Risks-Are-Leaders-Watching
43.
Survey: As 2025 Begins, CEOs Are Most Worried About a Trade War and Recession, https://www.conference-board.org/topics/c-suite-outlook/press/c-suite-outlook-2025
44.
Global Risks Report 2025: 'bleak' outlook for the decade ahead | World Economic Forum, https://www.weforum.org/stories/2025/01/global-risks-report-2025-bleak-predictions/
45.
Top geopolitical risks that could arise in 2025 - CBS News, https://www.cbsnews.com/video/top-geopolitical-risks-that-could-arise-in-2025/
46.
Top 10 geopolitical risks in 2025 Geostrategic Outlook | EY - US, https://www.ey.com/en_us/insights/geostrategy/2025-geostrategic-outlook

Read in other languages:

Support the Author:

If you enjoy my article, consider supporting me with a coffee!
buymeacoffee.com
https://buymeacoffee.com/kimjangwook
Search
February 2025
Today
S
M
T
W
T
F
S