Stocks Extend Relief Rally in Calm Trade as Investors Look Ahead to Earnings

U.S. equities traded in a relatively narrow and orderly range, marking a sharp contrast to the volatility driven by geopolitical headlines earlier in the week. Despite some late-session profit-taking, the major averages posted solid gains, extending Tuesday’s rebound and reflecting improving investor confidence.

The S&P 500 rose 0.6%, the Nasdaq Composite gained 0.9%, and the Dow Jones Industrial Average advanced 0.6%. All three indices closed above their respective 50-day moving averages, reinforcing the technical recovery underway following recent turbulence.

Economic data had little impact on trading. The latest Personal Income and Outlays report showed the core PCE price index— the Federal Reserve’s preferred inflation gauge—running at 2.8% year over year in November, slightly higher than October but unchanged from September. The reading did not materially alter expectations for monetary policy, contributing to the session’s calmer tone.

Gains were trimmed late in the day as some investors locked in profits, but market breadth remained constructive. Seven of the eleven S&P 500 sectors finished at or above their flatlines, underscoring continued broad participation in the advance.

Communication services led the market with a 1.6% gain, driven by strong performance from Meta Platforms, which offset continued post-earnings weakness in Netflix. Consumer discretionary followed closely, rising 1.2%, supported by a sharp rally in Tesla.

All seven of the so-called “Magnificent Seven” stocks finished higher, lifting the mega-cap growth ETF by 0.9%. Even so, the group remains under pressure on a weekly and year-to-date basis following recent pullbacks. Attention is now turning to next week, when several major technology leaders, including Meta, Tesla, and Microsoft, are scheduled to report earnings.

Investors are also focused on Intel’s earnings report after the close. Although the stock was little changed during the session, it remains one of the year’s strongest performers, with sizable gains both for the week and year to date.

Semiconductor stocks were relatively subdued, leaving the chip index with only a modest advance. Technology sector strength instead came from software names, where several companies posted strong gains and pushed the software ETF meaningfully higher.

Real estate was the weakest sector, falling 1.1% and extending its recent decline. Defensive sectors also lagged as risk appetite improved, with utilities, consumer staples, and health care underperforming. Several high-profile earnings-related disappointments weighed on sentiment in these groups, contributing to individual stock volatility.

Industrials finished slightly lower as well, pressured by post-earnings selling in select large-cap names.

Despite these pockets of weakness and late-session selling, the broader market maintained its upward trajectory. Reports that the European Union is preparing to unfreeze and ratify its trade agreement with the United States further supported sentiment, easing concerns that had fueled earlier selling.

With geopolitical tensions showing signs of moderation and inflation data remaining stable, equities appear to be on firmer footing. The next major test will come from upcoming earnings, particularly from key technology and semiconductor companies, which are likely to shape market direction in the days ahead.

Our FTinvest 11 model portfolio slipped 0.01% to close at 971.37, holding steady just below its all-time high of 971.44. The near-flat session reflects continued stability following a strong run, as the portfolio consolidates gains near record territory.

This level of consistency highlights FTinvest 11’s resilience and disciplined structure. With minimal volatility and firm positioning, the portfolio remains on solid footing as it maintains leadership in early 2026.