U.S. stocks rose last Friday as Wall Street tried to shake off a volatile start to the new year.
S&P 500's forward P/E (blue) is still stretched relative to history but has been under some pressure lately … forward EPS (white) continue to climb pic.twitter.com/xL7SZGxVrk
— Liz Ann Sonders (@LizAnnSonders) January 3, 2025
The S&P 500 rose 0.4%, the Dow Jones Industrial Average advanced 81 points, or 0.2%, and the Nasdaq Composite advanced 0.6%. Tech stocks were a bright spot for the market on Friday.
Chip giant Nvidia climbed more than 3%, while cybersecurity firm CrowdStrike added 2.6%. Homebuilder PulteGroup also rose by more than 2%, leading the consumer discretionary sector.
Energy on top today, followed by Utilities and Comm Serv; Cons Discr fell most today, with Materials not far behind … Russell 2000 Growth outperformed as S&P 500 fell most pic.twitter.com/SeO1YsAvLC
— Liz Ann Sonders (@LizAnnSonders) January 2, 2025
Stocks started January with a drop on Thursday, with investors profiting from some notable 2024 gainers such as Apple and Tesla.
The Dow ended the day lower by more than 150 points, or about 0.4%. The S&P 500 and the Nasdaq Composite slid about 0.2% each. All three benchmarks were higher earlier but fell back as the session progressed.
Stocks To Watch | 📊Ready, set, trade! Keep an eye on these stocks as they set the market abuzz #StockMarket pic.twitter.com/BgTydIF2z6
— ET NOW (@ETNOWlive) January 3, 2025
Global Markets | Here's a look at how the global equities performed overnight 📈 #NASDAQ #DowJones #FTSE #CAC #DAX pic.twitter.com/uaE3HMLkY0
— ET NOW (@ETNOWlive) January 3, 2025
These moves come after stocks ended 2024 on a sour note, with the S&P 500 closing out the year with four consecutive days of losses, a first going back to 1966. The broad market index notched a 23% gain for the year but fell 2.5% in December. The “Santa Claus” rally, in which stocks gain in the final five trading days of one year and the first two of the next, also failed to materialize.
The S&P 500 and Nasdaq Composite have fallen for five straight trading sessions, their longest losing streak since April of last year.
Tech leads stock market gains
On the economic data front, the ISM Manufacturing Index came in at 49.3 for December.
That is above expectations of 48.0, according to Dow Jones, but is still below the level of 50 that signifies expansion in the sector. News out of Washington, D.C., was also spurring some individual stock moves on Friday. Shares of U.S. Steel fell more than 4% after President Joe Biden said he would block the proposed acquisition by Nippon Steel.
Additionally, shares of Cerence surged more than 50% on the announcement of an expanded partnership with Nvidia, which will help the company improve its automotive large language models known as CaLLM, powered by Nvidia’s AI Enterprise. In other sectors, a group of alcoholic beverage companies saw shares falling in premarket trading after United States Surgeon General Dr. Vivek Murthy issued a warning on cancer risk due to alcohol consumption.
President Joe Biden announced Friday that he is blocking the proposed acquisition of U.S. Steel by Japanese firm Nippon Steel, citing national security concerns. “We need major U.S. companies representing the major share of US steelmaking capacity to keep leading the fight on behalf of America’s national interests,” Biden said in a statement. Shares of U.S. Steel were down 8% in premarket trading.
As the stock market wrapped up its first trading week of 2025, hopes for a “Santa Claus rally” faded. “The SPX would need to close above 5974 to avoid a failing rally. As the saying goes, ‘if Santa Claus should fail to call, bears may come to Broad and Wall,'” said BTIG’s Jonathan Krinsky.
