U.S. stocks rebounded on Friday as investors neared the end of a holiday-shortened week that also rang in a new year, which brought with it expectations of additional Federal Reserve rate cuts and looser regulatory policies from the incoming administration.
Market Snapshot
The Dow Jones Industrial Average rose 339.86 points, or 0.80%, to 42,732.13, the S&P 500 rose 73.92 points, or 1.26%, to 5,942.47 and the Nasdaq Composite rose 340.88 points, or 1.77%, to 19,621.68.
Market Movers
Tesla shares gained 8.2% after the electric-vehicle maker tumbled 6.1% on Thursday following weaker-than-expected fourth-quarter EV deliveries. The result means sales volume led to a sales decline in 2024, the company's first year-over-year sales decline since the introduction of the Model S Sedan, Tesla's first true production vehicle, in 2012.
Rivian Automotive surged 24% after the EV company delivered 14,183 vehicles in the fourth quarter, better than analysts' consensus of 13,000. Rivian delivered 51,579 units in 2024, beating expectations of 51,000.
Ford Motor ticked up 2.3% after full-year U.S. sales rose 4% from a year earlier to 2.1 million vehicles. U.S. sales in 2024 for General Motors also rose 4%, to 2.7 million vehicles.
Nvidia finished up 4.5% after gaining 3% on Thursday. The next big catalyst for Nvidia, the leading maker of AI chips, likely will be CEO Jensen Huang's speech at the CES tech show in Las Vegas on Monday.
United States Steel fell 6.5% after President Biden blocked the $14 billion sale of the U.S. steel company to Japan's Nippon Steel. In a statement, Biden said, "It is my solemn responsibility as president to ensure that, now and long into the future, America has a strong domestically owned and operated steel industry that can continue to power our national sources of strength at home and abroad; and it is a fulfillment of that responsibility to block foreign ownership of this vital American company."
Shares of Vistra rose 8.5%. The electricity and power-generation company rose 8.6% on Thursday. Vistra soared 258% last year as it rode the adoption of artificial intelligence by tech companies to significant gains. The company, like other utilities, provides electricity for giant AI data centers.
Carvana declined 11%, a day after short seller Hindenburg Research criticized the used-car retailer in a report. Wall Street rushed in to defend the company, however, and Carvana called the report "intentionally misleading and inaccurate" in a statement reported by the New York Post.
Chewy climbed 6.1% higher to $35.96 after analysts at Wolfe Research upgraded shares of the online pet products retailer to Outperform from Peer Perform with a price target of $42.
Shares of Block rose 6.2% to $92.16 as analysts at Raymond James upgraded the payments company to Outperform from Market Perform with a $115 price target. The analysts said a compelling "acceleration story" for 2025 was the main driver of the upgrade. However, they acknowledged that digital-wallet service Cash App could be a "wild card," as net new active users have been flat over the past two quarters.
Adobe fell 2.4% to $430.57 as UBS lowered its price target on the stock to $475 from $525 while maintaining a Neutral rating on the shares. The analysts said Adobe could lose ground as companies such OpenAI establish themselves in the market for creative artificial intelligence. UBS also noted that fears of copyright infringement have hindered the use of generative AI in advertisements and marketing campaigns.
Market News
US Manufacturing PMI Rises to Nine-Month High, but Challenges Loom
U.S. manufacturing moved closer to recovery in December, with production rebounding and new orders rising further, but the outlook remains uncertain amid the threat of higher tariffs that could raise prices of imported raw materials.
Despite the increase in the Institute for Supply Management's (ISM) Purchasing Managers Index (PMI) to a nine-month high last month, the tone of the survey was less upbeat, with phrases such as "volume decreases" and "significant slowdown" appearing in some of the comments from respondents. None of the six largest manufacturing industries grew last month.
Microsoft Plans to Invest $80 Billion on AI-Enabled Data Centers in Fiscal 2025
Microsoft is planning to invest about $80 billion in fiscal 2025 on developing data centers to train artificial intelligence (AI) models and deploy AI and cloud-based applications, the company said in a blog post on Friday.
Investment in AI has surged since OpenAI launched ChatGPT in 2022, as companies across sectors seek to integrate artificial intelligence into their products and services.
