US stocks rally to shake off new year jitters amid light trading

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Wall Street stocks closed the first week of 2025 on an upbeat note on Friday, amid fresh signs of manufacturing stabilization that halted several days of losses.

The S&P 500 closed 1.3 percent higher, posting its biggest gain since Nov. 6 — the following day. Donald TrumpIts US election victory. The benchmark index’s gains on Friday also ended a five-day losing streak – the longest such streak since April.

The tech-heavy Nasdaq Composite added 1.8 percent, helped by a more than 8 percent gain for electric-car maker Tesla, whose shares slipped a day before the announcement. Annual vehicle deliveries first fall In more than a decade. Semiconductor giant Nvidia advanced more than 4 percent.

The gains came at the end of a week short of New Year’s Day, which may have brought thin trading volumes. Analysts noted that some investors were preparing for the “real” start of 2025 on Monday.

But the day’s share price moves also came as a fresh reading on US manufacturing activity topped consensus forecasts, bolstering investor sentiment and Trump ally Mike Johnson. Re-elected Speaker of the US House of Representatives.

“It’s really a combination — I would call it a potpourri of different factors,” said Christina Hooper, chief global market strategist at Invesco. “First of all, we’ve seen some selling – and so at a certain point, I think investors recognize that when you have a multi-day sell-off there’s a buying opportunity.”

At the same time, Hooper added: “We’ve had some good news today in terms of production [figures] And I think it definitely sets a positive tone. We had a relatively smooth election in the House which helped contribute to a more positive sentiment.”

Friday’s ISM manufacturing purchasing managers’ index reading for December landed at 49.3 – below the 50 threshold that marks an expansion, but above economists’ forecasts and higher than the reading of 48.4 for November.

“The S&P 500 saw a broad rally [investors] We are comforted by the orderly re-election of the US House speaker, as it helps reduce political uncertainty,” said Dek Mularkey, managing director of SLC Management.

Referring to the Big Tech conglomerate that dominates the US stock market, he added “the Magnificent Seven, in particular, remain resilient despite high valuations. Investors are still confident that for the big expansion [artificial intelligence] The investment will pay dividends and secure a first mover advantage.”

Even after Friday’s sharp gains, the S&P and Nasdaq still posted small weekly losses.

Invesco’s Hooper believed the “overall environment is supportive of risk assets,” meaning “we may have more positive days than negative days” as the new year progresses. However, “there could very well be more volatility”, he said.

“Let’s face it: there is more uncertainty and the closer we get to January 20 [the day of Trump’s inauguration] I think there will be more question marks surrounding what may come from the new administration.”

Additional reporting by Will Schmitt