NEW YORK, Jan 4, 2026, 12:16 ET — Market closed
- Dow ended Friday higher to open 2026, snapping a four-session slide.
- Chip and industrial shares led the advance; Tesla slid after a second straight annual sales decline.
- Investors now await Monday’s ISM factory survey and Friday’s U.S. payrolls report.
The Dow Jones Industrial Average ended Friday’s session higher, giving U.S. blue chips a firmer start to 2026 after late-December selling. With Wall Street shut on Sunday, attention shifts to Monday’s open and a fresh run of economic data.
Why it matters now: the first full week of January often sets the tone for risk appetite as investors rebalance and put new cash to work. This year, markets are also trying to gauge whether growth is cooling enough to let borrowing costs ease without derailing corporate profits.
There is also one session left in what traders call the “Santa Claus rally,” a seasonal stretch covering the last five trading days of December and the first two of January. A weak finish to that window can amplify talk that momentum is fading at the start of the year.
The Dow rose 319.10 points, or about 0.7%, on Friday to end at 48,382.39. The S&P 500 closed at 6,858.47 and the Nasdaq at 23,235.63, while the Dow finished the holiday-shortened week down 328.58 points, or 0.7%. 1
Chip shares powered much of Friday’s bounce, with the Philadelphia SE Semiconductor index up 4% and gains in Boeing and Caterpillar—both Dow components—adding extra lift. Tesla slid 2.6% after annual sales fell for a second straight year, while Wayfair, Williams-Sonoma and RH climbed after President Donald Trump delayed a tariff increase on upholstered furniture, kitchen cabinets and vanities. Joe Mazzola, head of trading and derivatives strategy at Charles Schwab, said the market has a “buy the dip, sell the rip” mindset, even as investors scrutinize valuations for “AI plays,” or companies tied to artificial-intelligence spending. 2
The Dow is price-weighted, meaning higher-priced stocks can swing the index more than smaller-priced ones. That helps explain why strong moves in industrial names can offset softer trading in some big tech shares.
For now, investors are balancing optimism about demand for chips and other cyclicals against uncertainty over trade policy and the path of interest rates. Friday’s rally did little to erase the week’s losses, keeping near-term focus on whether the index can hold the 48,000 area and push toward the next round-number mark at 49,000.
But the early bounce risks stalling if incoming data reignites inflation worries, forcing traders to dial back expectations for lower rates. A second downside scenario is a renewed burst of tariff headlines that hits retailers and manufacturers already sensitive to costs.
The first test arrives Monday, Jan. 5, when the Institute for Supply Management releases its Manufacturing PMI at 10:00 a.m. ET; the Services PMI follows Wednesday, Jan. 7. The PMI is a survey of purchasing managers that investors use as a quick read on whether activity is expanding or contracting. 3
Labor-market focus intensifies Friday, Jan. 9, with the U.S. employment report for December due at 8:30 a.m. ET. Inflation takes center stage again on Tuesday, Jan. 13, when the consumer price index for December is released at 8:30 a.m. ET. 4
Traders also have the Federal Reserve’s next policy meeting on Jan. 27-28 circled for signals on how soon officials might ease again. 5
Before that, Monday’s session will close the Santa Claus window and offer the next verdict on whether dip-buying carries into the second trading day of January. The bigger catalyst comes at week’s end, when payrolls data hits and sets the tone for rate-sensitive stocks and the Dow’s early-2026 trend.
