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Market Update: New Beginnings in 2026

A trader diligently monitors the activity on the floor of the New York Stock Exchange (NYSE) just after the opening bell rang in New York on January 2, 2026. The atmosphere buzzes with anticipation as investors look toward the potential for the year ahead.

Angela Weiss | AFP | Getty Images

S&P 500 and Market Performance

On the very first trading day of 2026, the S&P 500 managed to close slightly higher, buoyed primarily by robust performance in the semiconductor sector. The index climbed 0.19%, concluding the day at 6,858.47 points. In contrast, the Nasdaq Composite dipped a mere 0.03%, finishing at 23,235.63 points. Both indices demonstrated positive trajectories earlier in the session; at their peak, the S&P 500 surged by 0.7%, while the Nasdaq advanced by a notable 1.5%. Meanwhile, the Dow Jones Industrial Average celebrated a gain of 319.10 points—or 0.66%—settling at 48,382.39.

Reflecting on Historical Trends

Interestingly, Friday’s performance marked a departure from the trend observed in recent years. Historically, the S&P 500 has finished lower on the first trading day for the past three years consecutively. According to Bespoke Investment Group, the data from the 1950s onward suggests no definitive trend, with first-day performances landing in the positive about 48% of the time.

Semiconductor Stocks on the Rise

Prominent players in the chip market, Nvidia and Micron Technology, experienced significant gains during the trading session. Nvidia saw its stock price rise by more than 1%, while Micron soared over 10%. The resilience and performance of these companies in 2025—Nvidia spiked by approximately 39%, and Micron surged by a striking 240%—highlight their status as favored names associated with artificial intelligence (AI).

The Struggles of Other Tech Stocks

However, the broader technology sector did not share the same fortune. Noteworthy declines were observed in software companies, with Salesforce dropping more than 4% and CrowdStrike experiencing a 3% decline. Additional industry giants, including Palantir Technologies and Microsoft, also faced setbacks.

Tesla’s Disappointing Deliveries

Tesla’s stock price fell by more than 2% after the company’s fourth-quarter deliveries fell short of analysts’ expectations. Despite the overall market’s mixed signals, 2025 had positioned the tech sector as a strong performer, heavily influenced by investments in AI. The S&P 500 enjoyed a year-on-year increase of more than 16%, marking its third consecutive annual advance. The Nasdaq saw even greater growth, jumping more than 20%, and the 30-stock Dow gained around 13% throughout the year.

Future Market Projections

According to Jay Hatfield, CEO of Infrastructure Capital Advisors, a continuing rotation between technology-focused and non-tech investments is expected. He anticipates a gradual upward trend overall, with his year-end target for the S&P 500 set at 8,000. He also stated that the rally would be more “balanced” considering a potential outperformance by regional banks.

Wall Street strategists are optimistic about 2026, forecasting further gains for the U.S. stock market. The CNBC Market Strategist Survey indicates that the average target for the S&P 500 stands at 7,629, suggesting a promising 11.4% upside.

Bright Spots in the Broader Market

Despite mixed performances in certain sectors, there were bright spots across the market. Shares of Wayfair surged approximately 8%, and RH stocks rose by around 6%, positively impacted by President Donald Trump’s recent announcement on New Year’s Eve to delay tariff increases on essential household goods, including upholstered furniture and cabinetry, for a full year.

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