Tech Shares Slide as Magnificent Seven Wobble: Markets Wrap
(Bloomberg) — US stocks fell on Friday, dragged down by weakness in Big Tech as investors started 2026 on a cautious footing.
The Nasdaq 100 was lower after rising more than 1% earlier in the session. The S&P 500 Index also fell, reversing previous gains. Shares of Tesla Inc. tumbled after the company reported deliveries for the fourth quarter that missed the average analyst estimate, while Amazon Inc. and Microsoft Corp. were also down. A Bloomberg gauge of Magnificent Seven stocks sank by about 1%.
Software stocks were among the biggest decliners, continuing a trend from 2025 that saw investors shun the group amid concerns about disruption from artificial intelligence.
Market participants “aren’t necessarily cautious,” said Steve Sosnick, chief strategist at Interactive Brokers. However, “they may be fully invested going into the new year.”
The wary start clashed with the optimistic tone most strategists struck at the end of 2025, when tech and AI helped power the S&P 500 to a third year of double-digit gains. Forecasts signal more of the same for 2026 despite lingering wariness over already stretched valuations and fears that vast amounts of capital expenditure could fail to pay off.
“The scope for further gains driven purely by valuation tech expansion in 2026 may be limited,” wrote Linh Tran, an analyst at XS.com. “Shocks related to interest rates, earnings, or policy could therefore trigger faster and more pronounced corrections than in earlier phases of the cycle.”
In Treasuries, the 30-year yield hovered around its highest level since September while the 10-year yield also rose. Precious metals unwound earlier gains, with gold prices lower and silver little changed. The dollar was flat against a basket of currencies.
Day One
The S&P 500 has recorded declines on the first trading days of the previous three years. Since 1953, the S&P 500’s median change to kick off a new year has been a 0.3% drop, with gains less than half the time, according to a note by Bespoke Investment Group.
What Bloomberg strategists say…
“In years when the S&P 500 rose in January yet failed to rally in December, returns were pretty mixed. Ultimately, seasonality offers little guidance. Earnings might help, but the fourth-quarter season doesn’t kick off until mid-January. That leaves stocks trading with little direction, guided mainly by business surveys and shutdown-impacted economic data.”
— Tatiana Darie, Macro Strategist, Markets Live. For the full analysis, click here.
Strategists at Deutsche Bank noted that several key themes apart from AI will shape markets in 2026, including new developments in US trade policies and specifically a Supreme Court case that will rule on the legality of levies. The Fed will be another major focus, with President Donald Trump expected to name a successor to Jerome Powell early in the year.
Barclays Plc warned equity markets could get choppy as they enter 2026 at record highs that are “over-reliant on AI success.” The team still expects further gains this year, thanks to resilient corporate earnings and a favorable trade-off between growth and monetary policy.
Corporate News:
Tesla Inc. finished off a dismal year in Europe with steep declines in several of the region’s major markets for new-car sales. BYD Co. met its full-year sales target and likely surpassed Tesla Inc. to become the world’s largest electric-vehicle maker in 2025 — a milestone overshadowed by a challenging outlook for the Chinese auto market in the year ahead. Orsted A/S filed a legal complaint after the Trump administration suspended the lease of a wind project that’s near completion off Rhode Island. Some of the main moves in markets:
Stocks
The S&P 500 was little changed as of 11:48 a.m. New York time The Nasdaq 100 fell 0.3% The Dow Jones Industrial Average rose 0.2% The Stoxx Europe 600 rose 0.6% The MSCI World Index was little changed Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1738 The British pound rose 0.2% to $1.3478 The Japanese yen was little changed at 156.74 per dollar Cryptocurrencies
Bitcoin rose 2.2% to $90,202.21 Ether rose 4.7% to $3,128.04 Bonds
The yield on 10-year Treasuries advanced two basis points to 4.18% Germany’s 10-year yield advanced five basis points to 2.90% Britain’s 10-year yield advanced six basis points to 4.53% Commodities
West Texas Intermediate crude fell 1.1% to $56.80 a barrel Spot gold rose 0.2% to $4,326.86 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Anand Krishnamoorthy, Subrat Patnaik, Rheaa Rao and Isabelle Lee.
©2026 Bloomberg L.P.
