The markets finished the week modestly higher as investors looked ahead to this week’s FOMC meeting. The NASDAQ gained 0.9%, the Dow added 0.5, and the S&P 500 rose 0.3%. Small-mid cap stocks also participated, with the Russell 2000 up 0.8%. Small cap value actually saw the greatest gains across the style boxes as large cap and small cap seemed to polarize each other.

Defensive stocks struggled, with utilities, healthcare, materials, real estate, and staples all trading meaningfully lower as investors continued rotating towards cyclicals ahead of Wednesday’s Fed decision. Early in the week, markets pulled back as cryptocurrency volatility weighed on sentiment and higher treasury yields pressured utilities and healthcare.

However, tech strength, particularly from NVIDIA, Apple, and Intel, helped stabilize the markets on Tuesday. By mid-week, breadth improved significantly with nine of the 11 S&P 500 sectors finishing higher on Wednesday. Thursday and Friday delivered quieter sessions, with the major averages trading near flat as investors digested mixed economic data. Inflation readings from the delayed personal income and outlays report came in largely as expected, doing little to shift rate expectations. Markets still assign roughly an 86% probability to a 25 basis point December cut.

Corporate headlines were active, including strong results from Salesforce and a major media deal as Netflix agreed to acquire Warner Bros. Discovery. Regarding the Warner Bros. buyout, this deal has already gotten a fair amount of bipartisan attention since the announcement late last week, with many on both sides of the political aisle claiming that the number one streamer purchasing the number three streamer would create too large of a company and effectively represent a monopoly within the entertainment space.

More to come in the coming weeks on this event. Overall, despite day-to-day choppiness, the market maintained a constructive tone and held its weekly gains. Investors now turn their attention to this week’s FOMC meeting, where a widely anticipated rate cut remains the key catalyst for the end of this year.