On in New York, U.S. equity markets opened the year with gains as technology stocks, led by semiconductors, pushed the S&P 500 higher. The broad index climbed 0.3% on the first trading day of 2026, the Nasdaq Composite gained 0.6% and the Dow traded up about 26 points, or 0.1%. Chip makers outperformed, while parts of software and some individual names lagged after mixed corporate updates. Policymakers, macro data and an eleventh-hour tariff delay for certain furniture imports also shaped market flows during the session.
Key takeaways
- The S&P 500 rose 0.3% on Jan. 2, 2026, reversing three straight first-day-of-year losses that occurred from 2023–2025.
- The Nasdaq Composite gained 0.6% and the Dow Jones Industrial Average traded up roughly 26 points, or 0.1%.
- Major chip names led the rally: Nvidia was up about 2% and Micron rose roughly 8% in early trading; in 2025 Nvidia had jumped ~39% and Micron surged more than 240%.
- Software stocks showed weakness, with Salesforce down over 3% and CrowdStrike off more than 2% amid mixed momentum outside chips.
- President Donald Trump delayed tariff increases on upholstered furniture and kitchen cabinets, keeping a 25% duty in place and averting planned hikes that would have raised some levies to 30% or 50%.
- S&P Global’s U.S. manufacturing PMI slipped to 51.8 in December from 52.2 the prior month, signalling slower but still positive expansion.
- Wall Street strategist consensus remains bullish for 2026: the CNBC Market Strategist Survey average S&P 500 target is 7,629, implying roughly 11.4% upside from current levels.
Background
Technology, and specifically artificial intelligence-related chipmakers, were among the strongest drivers of equities in 2025, with investors rotating capital into firms perceived to benefit from AI adoption. The S&P 500 delivered a third straight annual gain in 2025, up more than 16%, while the Nasdaq rose more than 20% and the Dow climbed about 13% as major benchmarks reached record highs. That rally, however, came with elevated volatility: market swings in 2025 included a sharp two-day selloff tied to tariff headlines in April, underscoring sensitivity to policy and trade news.
Entering 2026, market participants are balancing positive momentum from corporate gains and AI optimism against macro signals and policy uncertainty. Central bank rate-cut expectations helped underpin risk assets last year, according to institutional strategists, but headline returns masked uneven sector performance and episodic shocks. Trade policy remains a variable for specific sectors, notably retail and manufacturing tied to imported goods.
Main event
Trading on the first business day of the year saw semiconductors and related AI plays lead broad-market advances. Nvidia rose about 2% while Micron posted an approximately 8% increase, reflecting continued investor appetite for chip exposure after outsized 2025 moves. Those gains helped offset pullbacks in parts of the software complex, where names such as Salesforce and CrowdStrike declined amid profit-taking and rotation.
Tesla shares were pressured after the company reported fourth-quarter deliveries that missed some analysts’ expectations, a development that trimmed investor enthusiasm for EV names despite earlier premarket upticks. Elsewhere, Baidu’s U.S.-listed shares jumped after the company said it plans to spin off its semiconductor unit Kunlunxin and pursue a Hong Kong listing, a move investors treated as value-unlocking for China tech hardware ambitions.
Retailers tied to home goods were notable beneficiaries of trade policy news. Wayfair and RH each jumped more than 5% and 6%, respectively, after the White House delayed planned tariff increases on upholstered furniture and certain kitchen fixtures for one year, keeping the current 25% duty in place rather than increasing levies to 30% or 50% for specified categories.
On the data front, the S&P Global U.S. manufacturing PMI came in at 51.8 for December, down from 52.2, reflecting a modest cooling in new orders and output growth even as employment strengthened to its highest level since August. Market futures and premarket trading showed broad risk-on positioning into the opening bell, with major averages positive across the board.
Analysis & implications
The opening-day chip-led advance reinforces a market concentration theme that persisted through 2025: a subset of technology firms, particularly suppliers to AI workloads, have been primary drivers of index returns. That concentration raises both upside and downside risk for the broader market; if AI demand continues to accelerate, those leaders can lift benchmarks, but a re-pricing or earnings disappointment among them could produce outsized index volatility.
The mixed performance within technology — chips up, some software down — highlights divergence in investor expectations about profit cycles and capital intensity. Semiconductor firms benefited from optimism about data-center spending and generative AI deployment, while certain software names may be experiencing rotation after strong prior gains or facing nearer-term execution scrutiny.
The tariff delay for furniture and cabinets is a concrete policy development with immediate sectoral winners among import-exposed retailers and manufacturers. For firms such as Wayfair, RH and Williams-Sonoma, the postponement reduces near-term cost pressure and potential margin disruption. More broadly, it shows how trade headlines can produce sharp, discrete market moves even when macro trends are broadly favorable.
Comparison & data
| Index | 2025 return | Jan. 2, 2026 move |
|---|---|---|
| S&P 500 | more than 16% | +0.3% |
| Nasdaq Composite | more than 20% | +0.6% |
| Dow Jones Industrial Average | around 13% | +0.1% (≈26 pts) |
The table frames how 2025 outperformance, led by technology, translated into a modestly positive start to 2026 rather than an extended unwind. Investors should note that historically the first trading day of the year has no reliable directional bias; research cited by market-data firms indicates only about a 48% chance the first day finishes positive dating back to the 1950s.
Reactions & quotes
‘It was a strong year overall thanks to continued economic growth, optimism around AI, and more central bank rate cuts.’
Deutsche Bank strategists
Deutsche Bank strategists summarized the 2025 backdrop as supportive but volatile, noting that headline gains masked episodic shocks such as tariff-related selloffs in April.
‘We expect even greater things to come.’
Chris Metcalfe, Kingswood Group IBOSS
Chris Metcalfe commented on the FTSE 100 reaching new levels and emphasized the U.K.’s comparative appeal to some investors, a viewpoint that influenced cross-border allocation discussions.
‘It has a better chance, I think, of being here 100 years from now than any company I can think of.’
Warren Buffett, Berkshire Hathaway interview (CNBC)
Warren Buffett’s remarks about Berkshire Hathaway’s longevity were highlighted in market coverage and illustrate the attention given to corporate stewardship narratives amid management transitions.
Unconfirmed
- The ultimate market impact of Baidu’s planned Kunlunxin spinoff depends on regulatory approvals and successful listing steps, which remain subject to change.
- The CNBC Market Strategist Survey target of 7,629 for the S&P 500 is a consensus projection and not a guaranteed outcome for 2026.
- Longer-term effects of the tariff delay will depend on whether the pause becomes permanent or is extended and on ongoing trade negotiations.
Bottom line
Markets opened 2026 on a cautiously positive note, with semiconductor strength and AI-related optimism providing the lift while other segments of technology and individual company reports introduced dispersion. Policy moves, like the furniture tariff delay, can produce rapid re-ratings for exposed sectors and underscore the role of headlines in short-term market dynamics.
For investors, the near-term outlook remains a mix of momentum-driven opportunity and concentration risk; monitoring incoming macro data, corporate delivery and earnings reports, and policy developments will be essential as 2026 unfolds. Benchmarks started the year higher, but history and survey targets suggest a wide range of possible outcomes for the months ahead.