U.S. stock markets kicked off 2026 with modest gains, as the Dow Jones Industrial Average and S&P 500 snapped a four-day losing streak. The Dow rose 319.10 points (0.66%) to 48,382.39, while the S&P 500 gained 12.97 points (0.19%) to 6,858.47. The Nasdaq Composite remained largely flat, closing at 23,235.63.

Chipmakers Nvidia and Intel, along with aerospace giant Boeing, drove market recovery after midday losses, helping industrials and utilities sectors post strong gains. Meanwhile, heavyweights like Apple and Microsoft weighed on broader indices, and Tesla slid 2.6% after reporting declining annual sales for the second consecutive year.

“The market is seeing a ‘buy the dip, sell the rip’ mentality, where investors profit from short-term volatility,” said Joe Mazzola, head of trading & derivatives strategy at Charles Schwab.

Sector Highlights

• Philadelphia Semiconductor Index (.SOX): +4%
• Industrials (.SPLRCI) and Utilities (.SPLRCU): Solid gains
• Consumer discretionary: Pressured, with losses for Amazon and Tesla
• Furniture retailers: Wayfair (+6%), Williams-Sonoma (+5%), RH (+8%) rose after Trump delayed tariff hikes

Smaller stocks also rebounded, with the Russell 2000 up 1.1%, ending a four-day losing streak. Despite these gains, markets failed to deliver a traditional “Santa Claus rally”, which typically boosts stocks in late December and early January.

Market Drivers for 2026

Investors are closely watching Federal Reserve policy, as expectations for a more dovish Fed chair have sparked speculation of potential interest rate cuts later in the year. Dennis Dick, chief market strategist at Stock Trader Network, noted:

“The next Fed Chair is probably going to be much more dovish than Jerome Powell… we may see rates go down substantially in the second half of this year, which will benefit all stocks, not just tech.”

Upcoming January labor market data will be a key signal for monetary policy direction, following Powell’s caution in December regarding further rate cuts until jobs clarity emerges.

Trump-era tariffs continue to influence sectors, particularly furniture and home goods, after the administration delayed increases for another year.

Market Breadth

• NYSE: Advancing issues outnumbered decliners 2.01-to-1; 236 new highs, 95 new lows
• Nasdaq: 2,978 stocks rose, 1,818 fell; advancing/declining ratio 1.64-to-1; 54 new highs, 79 new lows
• Volume: 15.92 billion shares traded, slightly above the 20-day average of 15.87 billion

While the first trading day showed resilience, analysts note that volatility remains elevated, with AI-driven tech gains and policy uncertainty continuing to shape U.S. equity markets in early 2026.