NEW YORK, Jan 3, 2026, 17:26 ET
- The Dow and S&P 500 rose in the first trading session of 2026, lifted by a surge in semiconductor shares.
- AI-linked names outperformed, while Tesla fell after reporting weaker delivery data and big tech weighed on the Nasdaq.
- Investors are turning to next week’s U.S. jobs report and shifting Fed expectations for fresh direction.
The Dow and S&P 500 ended higher on Friday to start 2026, snapping four-session losing streaks as semiconductor shares rallied, while the tech-heavy Nasdaq finished fractionally lower.
The early tone matters because U.S. equities enter the new year after a three-year run of strong gains, with investors looking for signs that demand for AI-linked trades can broaden beyond a narrow group of winners.
It also comes as traders brace for a busier data calendar and new policy risks, after a muted holiday stretch that left markets prone to sharp moves on thin volume.
The Dow climbed about 0.7% and the S&P 500 added about 0.2%, while the Nasdaq dipped slightly, extending its losing streak to five sessions, Investopedia reported.
Chip stocks led the day, with the Philadelphia Semiconductor Index — a benchmark for major chipmakers — jumping 4% and Micron rising about 10% to a record close, Nasdaq.com reported.
AI-related names also moved sharply. U.S.-listed Baidu jumped 15% after its AI chip unit, Kunlunxin, filed for a Hong Kong listing, while Intel rose 6.7% and Nvidia gained 1.3%, Investopedia reported.
Industrial bellwethers helped lift the Dow, with Boeing and Caterpillar up about 5% and 4.5%, respectively, and Goldman Sachs also posting solid gains, according to Nasdaq.com and Investopedia.
Tesla slid 2.6% after reporting quarterly deliveries below estimates, weighing on consumer discretionary shares, Investopedia said.
“The market is seeing a buy the dip, sell the rip trading mentality,” said Joe Mazzola, head of trading & derivatives strategy at Charles Schwab. Traders use the phrase for buying on pullbacks and taking profits after sharp rallies. Reuters
Mazzola said investors are paying closer attention to valuations in artificial intelligence-linked stocks, even as many continue to step in on weakness, Reuters reported.
Trade policy also moved markets. President Donald Trump signed a proclamation delaying planned tariff increases on upholstered furniture, kitchen cabinets and vanities for another year, the White House said.
Across markets, Treasury yields rose and the dollar firmed as investors looked ahead to next week’s U.S. data, while European shares started the year at record highs and London’s FTSE 100 hit 10,000 points, Reuters reported.
Next week’s focus includes the monthly U.S. jobs report and other delayed indicators that could reset expectations for the Federal Reserve’s path on interest rates, as investors weigh whether the new-year rebound can hold.
