Wall Street edges higher in a wobbly start to 2026
[January 03, 2026] By
DAMIAN J. TROISE
NEW YORK (AP) — U.S. stocks eked out small gains on Wall Street Friday
in a wobbly day of trading to kick off the new year.
Markets were mostly quiet on the first trading day of 2026, with the
influential technology sector driving much of the up-and-down action.
The mostly minor moves also cap off a tepid and holiday-shortened week.
Markets were closed on Thursday for New Year's day.
The S&P 500 rose 12.97 points, or 0.2%, to 6,858.47. The benchmark index
is coming off a gain of more than 16% in 2025.
The Dow Jones Industrial Average rose 319.10 points, or 0.7%, to
48,382.39.
The Nasdaq composite fell 6.36 points, or less than 0.1%, to 23,235.63.
The index was weighed down by losses for Microsoft and Tesla.
Foreign markets fared better and benchmarks in Britain and South Korea
hit records.
Technology stocks steered the market, especially companies with a focus
on artificial intelligence, continuing the trend that pushed the broader
market to records in 2025.
Nvidia jumped 1.3% and was the biggest force trying to push the market
higher. But a 2.2% fall for Microsoft helped to check those gains.
Tesla also weighed on markets with a 2.6% drop after after reporting
falling sales for a second year in a row.
Nvidia, Microsoft and Tesla are among the most valuable companies in the
world and their outsized valuations give them more influence on the
stock 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.
Furniture companies gained ground following President Donald Trump's
move to delay increased tariffs on upholstered furniture. RH rose 8% and
Wayfair rose 6.1%.
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 were mostly stable. Prices for U.S. crude oil fell 0.2%
to $57.32 per barrel. The price of Brent crude, the international
standard, fell 0.2% to $60.75 per barrel.
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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)
 The price of gold
fell 0.3%.
Treasury yields held steady in the bond market. The yield on the
10-year Treasury rose to 4.19% 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, held at 3.48% from late
Wednesday.
Wall Street will move past the mostly quiet holiday season starting
Monday. 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. The hope is they'll 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.
___
AP Business Writer Elaine Kurtenbach contributed to this report.
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