Trading was light on the first day of the new year, in a shortened week, as investors and traders christened a new era. As the year opened, high flying techs and artificial intelligence favorites were ‘second fiddle, as investors pivoted into the ‘basics.’ Utilities, energy, metals, finance and ‘little tech’ were the market’s focus as the new year opened with a seemingly ‘revised’ list of newer buys on Friday. Friday’s market was mixed as the Dow Jones Industrial Average added 319 points, with the S&P 500 up 0.2% while the Nasdaq Composite slipped just below flatline, off 0.1%, the fifth straight session of negative finishes. Silver added 0.6% after a raging week of surging higher, [with more big-time coming]. Gold had a tough week, falling 4.9%, its “worst week since 2021.” The New Year opened Friday with the markets positive as investors drove the indexes higher to start the short week.
Expectations for 2026 are somewhat guarded as the three year run-up of heavy tech and the new found popularity of artificial intelligence stocks in 2025 have given the market concerns that valuations are suspect, with many worried that earnings will not support prices. However, as seen in 2025, “many investors still feel and expect stocks to have ‘room’ to keep climbing in 2026,” according to the WSJ writer, Hannah Erin Lang.
Oil nudges the markets… The Dow Jones on Tuesday soared upward 594.79 points, [1.2%] to a new record of 48977.18. The S&P 500 was up 0.6% while the Nasdaq added 0.7%. Most oil stocks reacted positively to President Trump’s seizure of President Maduro and wife of Venezuela, with most oil stocks and especially Chevron advancing 5%, the only oil company doing business with Venezuela. There was little movement on the price of oil as it hovered near $61.00 a barrel, (falling to $56.04 on Wednesday). “Those moves reflect investors’ optimism for the industry in 2026,” said Carol Schleif, chief market strategist at BMO Private Wealth, “including a better environment for deal-making and the prospect of lower interest rates.” Schleif added that her only concern is that so many on Wall Street are in agreement on expected gains. She described the feeling as “nauseously optimistic.”
Both the Dow Jones and the S&P 500 hit new records, again, on Tuesday. According to Dow Jones Market Data, it was the best market start since 2023, as traders and investors haven’t lost a beat in continuing to invest in the general market as the Dow Jones Industrial Average surged 485 points to another record high, close to 50000! Both the S&P 500 and Nasdaq Composite edged up 6%. “It’s that optimism people feel [and] it’s probably cash on the sidelines that is coming back to work,” said Victoria Fernandez, chief market strategist at Crosshard Global Investments. After three straight years of strong markets, up “double digit” each year, investors are confident that corporate earnings will continue. Early market indications point to ‘more-of-the-same’ with nearly all sectors contributing. The metals, finance, health and energy sectors and smaller tech are expected winners, likely to outperform the popular techs. “What we are seeing today is the broadening of this rally,” said Rob Haworth, senior investment strategy director at U.S. Bank Asset Management Group. “That’s leading investors to race into the market.”
The Dow Jones slid back 466 points on Wednesday or 1% as investors took profits, after two record setting days. Jobs data, JOLTS, due out tomorrow and Friday, and the jobs report coming in December will give important information to the Fed in assessing the need for a rate cut.
RUMBLINGS ON THE STREET
Chris Bloomstras, President and chief investment officer of Samper Augustus Investments group, WSJ – “Warren exits his final year having invested the same ways he did for six decades; patiently opportunistic and never placing the company in harm’s way.” [Who has invested in Berkshire since 2000]
Ted Bahnsen, chief investment officer at the Bahnsen Group, WSJ – “The story right now going into 2026 is the continuation of what we saw at the end of ‘25–a really interesting and somewhat unexpected broadening out of the market. There is a significant amount of uncertainty around how this AI thing is going to make money.”
Rod Thummel, senior portfolio manager at Tortoise Capital, WSJ – “No company, probably even globally, is going to make an investment without political stability and clarity… It’s going to take years, rather than days or months, before anyone goes in and commits capital.”
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