The S&P 500 and the Dow on Thursday eclipsed records set just a few weeks earlier, but both indexes retreated on Friday to close out a mixed week for stocks. The Dow finished with a 1.1% total return for the week, while the S&P 500 fell 0.6% and the NASDAQ ended 1.6% lower. Today is Dick Van Dyke’s 100th birthday. I have broken down this week’s update using quotes from his character, Bert, in Mary Poppins.
“Can’t put my finger on what lies in store, but I feel that what’s to happen has all happened before.” – Dick Van Dyke
Are tech stocks losing their grip on market leadership? This week, many of the technology-oriented stocks that have driven 2025’s gains weighed on the broader market. More cyclical, value-oriented stocks climbed, and a large-cap value equity style benchmark finished 0.6% higher for the week versus its growth counterpart, which was down 1.5%. We have seen this story play out several times in the past few years. Tech stocks underperform for a period of time, and all the pundits come out and say that we are at the beginning of a massive rotation out of tech. Each time, those pundits have been wrong as tech stocks end up regaining market leadership. I think that is what will happen this time around as well.
“In that cold, heartless bank day after day, hammed in by mounds of cold, heartless money” – Dick Van Dyke
The Federal Reserve seems to be controlling the money supply in a manner that is in line with market expectations. For its third meeting in a row, the U.S. Federal Reserve took the predicted path by cutting its benchmark rate by a quarter percentage point. Nine of the Fed’s voting members supported a cut, two others wanted rates to stay unchanged, and a third member voted for a deeper half-point reduction. That adds to the uncertainty about how many cuts could be ahead in 2026. The President wants lower rates, and while that is a usually good thing for the market, it could become a source of anxiety for investors come next spring when it comes time to choose Chair Powell’s successor. The market hit all-time highs on Thursday following the rate cut. However, it fell on Friday when the frontrunner to be Powell’s successor, Kevin Warsh, asserted that the Fed chair ought to consult the president about interest rate decisions. The market cares deeply about the independence of the Federal Reserve.
“Never was there a happier crew than they who sing Chim Chim Chiree Chim Chiroo!” – Dick Van Dyke
Investors in precious metals have a lot to be happy about this year. 2025’s rise in gold prices has gained most of the attention. However, the price of silver has seen far bigger gains. Silver prices on Friday briefly climbed as high as $65 per ounce, a record level. Silver is up 115% year to date. I would not go chasing gains in silver. Precious metals have not been great long-term investments. Silver just crossed above where it was in 2011 in October of this year. Metals go up in short bursts, usually during periods of anxiety or uncertainty in the markets. They can be good as a shorter-term trade or as a small piece of your portfolio as a hedge. They should not be a significant percentage of your overall portfolio.
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