US markets opened higher on Friday, January 2nd, Beijing time. On the first trading day of 2026, technology stocks attempted to extend their upward momentum from the previous year.
The Dow Jones Industrial Average rose by 84.99 points, or 0.18%, to 48,148.28; the Nasdaq Composite climbed 235.80 points, or 0.61%, to 23,477.79; and the S&P 500 gained 35.36 points, or 0.52%, reaching 6,880.86. Over the past three years, the S&P 500 has closed lower on each year's first trading day. Data from Bespoke Investment Group indicates that looking back to the 1950s, there is no clear trend, with the probability of a positive first-day close standing at approximately 48%. Technology stocks were broadly higher. Nvidia and Palantir continued their advances from the previous year. These two AI-related stocks had a stellar performance in 2025, with Nvidia gaining about 39% for the year and Palantir skyrocketing 135%. Other major tech names like Apple, Alphabet, and Microsoft also traded higher. Additionally, shares of online home goods retailer Wayfair and luxury furniture seller RH moved up after US President Trump announced at year-end a one-year delay in tariff increases on upholstered furniture, kitchen cabinets, and dressers. President Trump's executive order specifically postponed the implementation of a 30% tariff on upholstered furniture and a 50% tariff on kitchen cabinets and dressers, maintaining the 25% tariffs that have been in effect since last September. Driven by sustained investor inflows into artificial intelligence (AI) related stocks, the technology sector was the best-performing group in 2025, fueling a significant rally across the broader market. The S&P 500 rose over 16% last year, marking its third consecutive annual gain; the Nasdaq Composite jumped more than 20%; and the Dow Jones Industrial Average advanced approximately 13%. All three major benchmarks reached record highs last year. Strategists at Deutsche Bank wrote, "Overall, 2025 was a strong year, bolstered by ongoing economic growth, optimism around AI, and further interest rate cuts by central banks. However, these headline gains masked significant volatility, particularly in April when President Trump's 'Liberation Day' tariff announcement triggered the S&P 500's fifth-largest two-day decline since World War II." Wall Street strategists anticipate further gains for US stocks in 2026. According to a survey of market strategists, the average year-end target for the S&P 500 is 7,629 points, implying an upside potential of 11.4%.
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