US Stocks Inch Higher in Volatile Start to 2026: Markets Wrap
(Bloomberg) — US stocks edged higher on Friday, as investors started 2026 on cautious footing following a year of strong equity performance while keeping an eye on rising Treasury yields.
The benchmark S&P 500 Index closed up 0.2% after swinging between gains and losses earlier in the session. The Nasdaq 100 was down 0.2%, with both gauges dented by weakness in technology names. Shares of Tesla Inc. fell after the company reported deliveries for the fourth quarter that missed the average analyst estimate, while Amazon Inc. and Microsoft Corp. slid. A Bloomberg measure of Magnificent Seven stocks sank by about 1%.
There were pockets of strength as well, with some semiconductor equipment makers and other chip stocks rallying, including Nvidia Corp. and Micron Technology Inc. Shares of energy companies were mostly higher, along with industrials and utilities.
The mixed 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.
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.”
Investors were also watching Treasury yields, which can weigh on stocks if they rise too quickly. The 10-year yield was up two basis points at 4.19%. The 30-year yield hit 4.88% earlier in the session, its highest level since September, before retreating.
“Stocks are stumbling out of the gate as interest rates rise to uncomfortable levels,” said Adam Turnquist, chief technical strategist at LPL Financial. A breakout above 4.20% on the 10-year “would generate an upside target near 4.50%,” he added.
Precious metals unwound earlier gains, with gold prices lower and silver up about 1.2%. The dollar was up little changed a basket of currencies. Bitcoin rose 1.6%.
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.
Bank of America Corp. strategists see the S&P 500 hitting 7,100 this year, a roughly 4% gain from its current price.
The “growing capital-intensity of big tech spenders that make up an outsized share of the index, elevated multiples, plus cracks in the labor market (with further downside linked to AI upside) argues for a more cautious stance,” they wrote.
Corporate News:
Mega-cap tech companies led a disproportionate share of the US stock market’s gains in 2025. Their executives also accounted for an outsized share of insider selling as billionaire founders, CEOs and directors took more than $16 billion off the table. 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 rose 0.2% as of 4:01 p.m. New York time The Nasdaq 100 fell 0.2% The Dow Jones Industrial Average rose 0.7% The MSCI World Index rose 0.3% Currencies
The Bloomberg Dollar Spot Index was little changed The euro fell 0.2% to $1.1720 The British pound was little changed at $1.3459 The Japanese yen was little changed at 156.85 per dollar Cryptocurrencies
Bitcoin rose 1.6% to $89,725.39 Ether rose 4.5% to $3,119.96 Bonds
The yield on 10-year Treasuries advanced two basis points to 4.19% Germany’s 10-year yield advanced five basis points to 2.90% Britain’s 10-year yield advanced six basis points to 4.54% Commodities
West Texas Intermediate crude fell 0.2% to $57.30 a barrel Spot gold rose 0.2% to $4,329.68 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.
