Last week’s economic landscape was defined by volatility in a shortened trading week that ultimately saw gains.

Investors were encouraged by the inauguration of President Trump and his pro-business policies but remained wary of potential inflationary pressures stemming from tariffs. With a light data schedule, attention centered on corporate earnings, where about 12% of companies in the S&P 500 have reported so far, revealing fourth-quarter profit growth of roughly 12% year-over-year. Additionally, AI-focused stocks saw a lift as Oracle, Softbank, and OpenAI pledged to invest $500 billion in AI infrastructure over the next four years.

Next week, markets will closely watch the Federal Reserve’s decision on interest rates as the central bank navigates rising inflationary pressures. Current market predictions lean toward the Fed pausing its rate cut drive, but the press conference and upcoming Core PCE inflation data could influence the outlook. Personal spending and income figures are also slated for release, offering additional insight into the health of consumer demand.

Given this economic backdrop, let us see how this impacts the performance of various investment strategies.