John Hancock: Weekly Market Recap Week Ended January 2

Triple play

The S&P 500’s 17.9% total return for 2025 marked the third year in a row that the index generated a double-digit gain. However, the latest result fell short of 2024’s 25.0% return and 2023’s 26.3% figure, which were the strongest back-to-back annual results since 1997/1998.

Sector stories

For the third year in a row, communication services and information technology were the top-performing sectors in the S&P 500, as they generated total returns of 33.6% and 24.0% in 2025, according to S&P Dow Jones Indices. All 11 sectors delivered positive performance; while real estate was the weakest sector, it nevertheless generated a 3.2% return.

Earnings outlook

As major U.S. banks prepare to open quarterly earnings season in mid-January, analysts expect that fourth-quarter earnings per share for companies in the S&P 500 rose by an average of 8.3%, according to a recent survey from FactSet. At the sector level, information technology and materials are expected to generate the strongest fourth-quarter earnings gains.

As January goes …

Historically, January’s stock market performance has been a strong indicator of what may be in store for the rest of the year. In fact, about 72% of the time since 1929, the S&P 500 has posted a positive return for the year after gaining ground in January or has gone on to post an annual loss when the market has declined in the first month, according to S&P Dow Jones Indices. That’s also been the case each of the past four years.

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