Early gains fade as Wall Street wobbles into 2026
[January 02, 2026] By
DAMIAN J. TROISE
NEW YORK (AP) — Stocks wavered on Wall Street Friday to kick off the new
year as early gains led by technology stocks failed to hold up.
The S&P 500 fell 0.1% after having been up as much as 0.7% at the start
of trading. The benchmark index is coming off a gain of more than 16% in
2025.
The Nasdaq composite fell 0.2%. The Dow Jones Industrial Average managed
a gain of 82 points, or 0.2%, as of 12:49 p.m. Eastern.
Major indexes are closing a mostly tepid, shortened holiday week.
Markets were closed Thursday for New Year’s Day.
Markets in Europe and Asia made strong gains. Indexes in Britain and
South Korea hit records.
Technology stocks were steering the market, especially companies with a
focus on artificial intelligence, continuing the trend that pushed the
broader market to records in 2025.
Nvidia jumped 1.6% and was the biggest force trying to push the market
higher. Broadcom rose 0.4%. But a 0.8% drop from Apple and a 2.3% fall
for Microsoft helped to counter those gains.
Those technology companies are among the most valuable companies in the
world and their outsized valuations give them more influence on the
market's direction. That includes sometimes pushing the market up and
down from hour to hour.
Technology companies have been a major focus because of advancements in
artificial intelligence technology and the potential for growth within
the sector. Wall Street has been betting that demand for computer chips
and other items needed for data centers will help justify the big
investments from technology companies and their pricey stock values.
Tesla fell 2% after reporting falling sales for a second year in a row.
E-commerce giant Alibaba climbed 4.3% and Baidu, maker of the Ernie
chatbot, jumped 9.4% in Hong Kong after it said it plans to spin off its
AI computer chip unit Kunlunxin, which would list shares in Hong Kong
early in 2027. The plan is subject to regulatory approvals.
Crude oil prices slipped. Prices for U.S. crude oil fell 0.9% to $56.92
per barrel. The price of Brent crude, the international standard, fell
0.9% to $60.31 per barrel.
The price of gold fell 0.1%.
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Trader Michael Capolino works on the floor of the New York Stock
Exchange, Friday, Jan. 2, 2026. (AP Photo/Richard Drew)
 Treasury yields held steady in the
bond market. The yield on the 10-year Treasury rose to 4.18% from
4.17% late Wednesday. The yield on the two-year Treasury, which
moves more closely with expectations for what the Federal Reserve
will do, slipped to 3.47% from 3.48% late Wednesday.
Wall Street will move past the mostly quiet holiday season after
Friday. The first full week of the new year will include several
closely watched economic updates. They will also be some of the last
big updates the Fed sees before its next meeting at the end of
January.
Next week will feature private reports on the status of the services
sector, which is the largest part of the U.S. economy, along with
consumer sentiment. Government reports on the job market will also
be released. They will all help paint a clearer picture of how
various parts of the U.S. economy closed out 2025 and where it might
be headed in 2026.
The Fed has had a more difficult task because of the complex shifts
within the economy. It cut interest rates three times toward the end
of 2025, partly to help counter a weakening jobs market. But
inflation remains above its target rate of 2% and cutting interest
rates could add more fuel to rising prices. Consumers have already
expressed more caution amid the squeeze from stubborn inflation and
the U.S. trade war with much of the world has added more
uncertainty.
The Fed has already signaled concern and caution. Wall Street is
betting that the central bank will hold its benchmark interest rate
steady at its January meeting.
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AP Business Writer Elaine Kurtenbach contributed to this report.
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