Major Wall Street indexes hovered near record highs in light trading on Friday following the Christmas holiday, as investors bet that further interest rate cuts and strong corporate earnings will push markets to new peaks next year.
The benchmark S&P 500 index touched an all-time intraday high, edging closer to the 7,000-point mark, while the Dow Jones Industrial Average stood just 0.3% below its record set on December 12.
This performance followed a recent rally in US equities after months of choppy selling, during which artificial intelligence-related stocks came under pressure on concerns over elevated valuations and rising capital expenditure weighing on profits.
However, signs of resilience in the US economy, the prospect of a more accommodative monetary policy with the appointment of a new Federal Reserve chair next year, and renewed appetite for AI stocks have supported a market rebound. This has put the S&P 500, Dow Jones, and Nasdaq on track for a third consecutive year of gains.
Brian Jacobsen, chief economist at Annex Wealth Management, said that 2026 is likely to be a testing year for markets, noting that companies will need to deliver tangible gains in productivity and profit margins from artificial intelligence and other investments.
According to data compiled by LSEG, analysts expect S&P 500 earnings to rise by 15.5% in 2026, compared with projected growth of 13.2% in 2025.
The S&P 500 has gained more than 17% since the start of 2025, driven for much of the year by mega-cap technology stocks, although the rally has recently broadened to include cyclical sectors such as financials and basic materials.
Traders are also watching to see whether the so-called “Santa Claus rally” materializes this year. This seasonal pattern typically sees gains in the S&P 500 during the final five trading days of the year and the first two sessions of January, according to the Stock Trader’s Almanac. The period began on Wednesday and runs through January 5.
At 9:39 a.m. Eastern Time, the Dow Jones Industrial Average rose 10.77 points, or 0.02%, to 48,741.93. The S&P 500 added 9.97 points, or 0.14%, to 6,942.02, while the Nasdaq Composite climbed 42.38 points, or 0.17%, to 23,655.69.
Six of the 11 S&P 500 sectors were higher, led by information technology, while utilities and industrials were the weakest performers.
Nvidia shares advanced 1.5% after the AI chip designer agreed to license chip technology from startup Groq and appoint its chief executive.
By contrast, Biohaven shares fell 1.4% after its experimental depression drug failed to meet the primary endpoint in a mid-stage trial, adding to a series of setbacks the company has faced this year.
Coupang shares surged 8.6% after the e-commerce firm said that all customer data leaked from its South Korean operations had been deleted by the suspected perpetrator.
US-listed precious metals miners, including First Majestic, Coeur Mining, and Endeavour Silver, also rose between 1.8% and 3.3%, as gold and silver prices hit new record highs.
Advancing stocks outnumbered decliners on the New York Stock Exchange by a ratio of 1.11 to 1, while declining issues led advancers on the Nasdaq by a ratio of 1.34 to 1.
The S&P 500 recorded 13 new 52-week highs and no new lows, while the Nasdaq Composite posted 18 new highs and 52 new lows over the same period.
