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Wall Street stocks rallied on Friday to end the first week of 2025 on an upbeat note amid fresh signs of manufacturing stability that halted several days of losses.
The S&P 500 ended the day 1.3 percent higher, marking its biggest gain since Nov. 6 — the day after Donald Trump won the US election. The benchmark index’s gains on Friday also ended a five-day losing streak – the longest such streak since April.
The technology-heavy Nasdaq Composite added 1.8 percent, helped by a more than 8 percent rise in electric vehicle maker Tesla, whose shares had fallen a day earlier after it reported its first drop in annual shipments. of vehicles in more than a decade. Semiconductor giant Nvidia advanced more than 4 percent.
Friday’s gains came at the end of a week shortened by New Year’s Day, which could bring thinner trading volumes. Analysts noted that some investors were simply preparing for the “real” start of 2025 on Monday.
But the day’s stock price moves also came as a fresh reading of US manufacturing activity topped consensus forecasts, bolstering investor sentiment, and as Trump ally Mike Johnson was re-elected as Speaker of the US House of Representatives.
“It’s really a combination — I would call it a potpourri of different factors,” said Kristina Hooper, chief global markets strategist at Invesco. “First, we’ve seen some selling — and so at a certain point, I think investors recognize that there are buying opportunities created when you have a lot of selling days.”
At the same time, Hooper added, “We got some good news today in terms of production (numbers) and I think that certainly set a positive tone. We had a relatively quiet election in the House of Representatives which also contributed to a more positive sentiment.”
The ISM manufacturing purchasing managers’ index reading on Friday eased to 49.3 for December – below the 50 threshold that marks expansion, but above economists’ forecasts and higher than a reading of 48.4 for November.
“The S&P 500 saw a broad rally as (investors) were comforted by the orderly re-election of the Speaker of the US House of Representatives, as this helps reduce political uncertainty,” said Dec Mullarkey, managing director at SLC Management.
Referring to the group of Big Tech names that have come to dominate the US stock market, he added that “The Big Seven, in particular, remain resilient even as valuations are high. Investors are still confident that spending heavily on (artificial intelligence) investments will pay dividends and provide a first-mover advantage.”
Even after a strong rally on Friday, the S&P and Nasdaq still posted small weekly losses.
Invesco’s Hooper believes “the overall environment is supportive of risk assets,” meaning “we are likely to have more positive days than negative days” as the new year progresses. However, she said, “I think there could be more volatility.”
“Let’s face it: there’s more uncertainty, and as we get closer and closer to January 20” — Trump’s inauguration day — “I think there’s going to be more question marks about what’s likely to come from the new administration.” .
Additional reporting by Will Schmitt
