NEW YORK, January 1, 2026, 13:35 ET — Market closed
- U.S. markets are shut for New Year’s Day; the Communication Services Select Sector SPDR ETF was last down about 0.5% after the final 2025 session.
- Meta agreed to buy AI startup Manus in a deal a source valued at $2–$3 billion, sharpening focus on big-tech AI spending and regulation.
- Warner Bros Discovery is expected to reject Paramount Skydance’s amended $108.4 billion bid as Netflix’s rival proposal stays in play.
Meta Platforms’ plan to buy artificial-intelligence startup Manus, in a deal a source valued at $2 billion to $3 billion, kept U.S. communication-services stocks in focus heading into 2026. U.S. equity markets were closed on Thursday for the New Year’s Day holiday.
The timing matters because communication services — home to the biggest U.S. online advertising platforms, streamers and telecom operators — finished 2025 as the best-performing sector in the S&P 500, helped by Alphabet’s 65% jump. Investors now start the year weighing whether AI-led leadership can extend as deal and policy risks rise.
The sector’s benchmark ETF is also top-heavy. State Street’s factsheet shows Meta at about 19.8% of XLC assets, with Alphabet’s two share classes together near another fifth, making single-stock news a major driver for the group.
In the final session of 2025, XLC was last down 0.5% at $117.72, while Meta slipped 0.9% and Alphabet eased 0.3%. Wall Street ended the year’s last trading day lower, with the S&P 500 down 0.74% in holiday-thin volume, Reuters reported.
The Manus deal had already lifted the group earlier in the week. Communication-services stocks were among the session’s biggest gainers on Tuesday after Meta said it would acquire Manus and the shares rose 1.1%, Reuters reported.
Meta did not disclose financial terms, but a source with direct knowledge said the transaction values the Singapore-based firm at $2 billion to $3 billion. Meta said it will operate and sell the Manus service and integrate it into products including Meta AI.
Regulatory scrutiny is likely to be a key swing factor because Manus was founded with Chinese roots, even after shifting its headquarters to Singapore. “Scrutiny is almost guaranteed; anything with Chinese roots and ‘AI’ in the headline now triggers Washington’s reflexes,” Jeremy Goldman, senior director at Emarketer, said. Reuters
Dealmaking also dominated the media end of the sector. Warner Bros Discovery is likely to reject Paramount Skydance’s amended $108.4 billion hostile bid, a person familiar with the matter said.
The decision would keep Warner on track to pursue a rival cash-and-stock deal with Netflix, while Paramount has kept its $30-per-share all-cash headline price but adjusted financing assurances and fees, Reuters reported. Under the Netflix terms, Warner would face a $2.8 billion breakup fee if it walks away.
In the last session of 2025, Warner Bros Discovery was last down 0.4% at $28.82 and Paramount Skydance fell 0.9% to $13.40. Netflix was little changed, Disney fell about 0.9%, and telecom names AT&T and Verizon edged higher.
Before Friday’s reopening, traders will be watching whether the sector can hold its late-December range as liquidity returns. XLC traded between $117.69 and $118.29 in the last session, levels that can act as near-term markers for momentum-driven flows.
The next major catalyst on the calendar is earnings. Netflix is set to report quarterly results after the close on Jan. 20, according to Wall Street Horizon, putting subscriber trends and advertising commentary back in the spotlight for the group.
Macro data will also matter for rate-sensitive growth names that dominate communication-services index weightings. The Labor Department’s calendar lists the December jobs report for Jan. 9 and the December consumer price index for Jan. 13, while noting release dates are subject to change.
