Even after Thursday's market malaise, stocks roll into Friday with some of their best weekly gains of the year.
The S&P 500 slid 2 to 2,347, but it is up 1.7 percent for the week, and if it holds those gains it would be the best week since Jan. 6. The Dow was up 7 points to a new high of 20,619 Thursday, and was up 2.2 percent for the week so far in its best weekly gain since Dec. 9.
Ahead of the three-day President's Day holiday weekend, volume is expected to be light. The only data is leading index at 10 a.m. ET, and just a few earnings. Allianz, Deere, Campbell Soup, Moody's, VF Corp, Bloomin' Brands, JM Smuckers and Spectra Energy all report before the bell.
The S&P 500 was down for the first day in eight sessions Friday, as the rally took a pause.
"This is not a pullback. This is just a rest," said Peter Boockvar, chief market analyst at The Lindsey Group.
President Donald Trump held a press briefing Thursday afternoon. He shed no light on the tax reform details, but Republicans made it clear replacing the Affordable Care Act is up next. House Speaker Paul Ryan said legislation could be introduced after Congress returns from the three-day weekend.
"I think that people want to hear what [Trump's] going to say about taxes. The rubber is meeting the road now on tax reform. Either it's happening or not," Boockvar said.
Boockvar said there's concern tax reform could get bogged down. "Paul Ryan today reported he's fully behind his tax plan, which includes the border-adjustment tax. The pushback is getting intense, and the lobbying is getting intense. I think people are realizing that without border-adjusted tax, there's no tax reform," said Boockvar.
Proponents say the border-adjustment tax, which taxes imports but not exports, should put U.S. companies on a more level playing field, and bring jobs back to America. On the other hand, opponents say the dollar may not rise enough to prevent inflation from affecting consumers and companies that rely on imports, such as retailers.
Regardless of the concerns, the market has been rising on the idea that Trump will cut taxes, launch a fiscal spending program and cut back on regulation. It has ignored some of the concerns about Trump's views on trade and the controversy over his former national security advisor.
"I think the market is basically saying, 'Oh my gosh, Trump is going to wave his wand and earnings expectations are going to double,'" said Samuel Stovall, chief investment strategist at CFRA. "I think everyone is assuming that everything he's promising is going to come true. … My feeling is we're going to go through the progression of hype to snipe to gripe."
Stovall and others said a story in The Wall Street Journal Thursday was a concern, but it did not appear to impact the market. The article said that intelligence officials are withholding information from Trump because they are concerned it could be compromised or leaked.
"We know Trump would equal uncertainty. The perfect example is this Russian story and the CIA not sharing information with him. The question is: Will it unsettle markets? So far, it hasn't happened. Right now nothing unsettles markets. We haven't had a 1 percent down day since October," said Michael O'Rourke, chief market strategist at JonesTrading.
O'Rourke said the market is, however, also more keenly focused on data now that Fed Chair Janet Yellen's hawkish tone this week affirmed the Fed could raise rates soon.
"I think people are going to be looking at economic data to see whether inflationary tendencies are accelerating. Are we going to see an increasing likelihood of a March Fed tightening? It's still on the table, most certainly, and I don't think anything in the minutes are going to make a difference," said Stovall. "…Unless the members sounded a lot more hawkish than people assumed. I did not really think that's the case. There's nothing I can really anticipate right now that would make the market stumble."
The minutes from the Fed's Feb. 1 meeting are released Wednesday afternoon. Next week brings a final burst of earnings, with reports from major retailers, and consumer sentiment and housing data are highlights of the economic calendar.
Stovall is looking ahead to the bull market's eighth anniversary March 9. The market has done very well in the last year, with the S&P 500 up 18 percent since last March. Stovall noted that history shows that bull markets that are three years old or older have averaged gains of 16 to 37 percent in their final 12 months.
"Bull markets don't go out with a whimper," said Stovall.