US stocks rose on Friday, the first trading day of 2026, as technology shares extended their momentum from last year’s artificial intelligence-driven rally and investors entered the new year with a broadly constructive outlook.
The Dow Jones Industrial Average traded 124 points higher, or 0.3%, while the S&P 500 gained 0.6%.
The Nasdaq Composite outperformed, advancing 1.1%, as large-cap technology stocks led the early move higher.
What’s driving the first-day gains
Friday’s gains marked a break from the pattern of recent years. The S&P 500 had finished lower on the first trading day of each of the past three years.
Over a longer historical period, however, first-day performance has shown no clear directional bias.
Since the 1950s, the benchmark index has ended the first trading session of the year higher about 48% of the time, according to data from Bespoke Investment Group.
Technology shares were among the strongest contributors to the market’s advance.
Nvidia rose more than 2% in early trading, building on a strong 2025 performance in which the stock gained about 39%.
Shares of Apple and Alphabet also moved higher, reinforcing the sector’s leadership at the start of the year.
Technology was the standout trade in 2025, helping propel the broader market to solid gains as investors continued to favour companies seen as key beneficiaries of artificial intelligence spending and adoption.
Tariff delay lifts select consumer names
Outside of technology, select consumer stocks posted sharp gains following a late policy move from the White House.
Shares of Wayfair and RH jumped more than 7% and 8%, respectively, after President Donald Trump postponed tariff increases on upholstered furniture, kitchen cabinets and vanities by one year.
The executive order delays the implementation of a 30% duty on upholstered furniture and a 50% levy on kitchen cabinets and vanities, while leaving in place a 25% tariff imposed in September.
The reprieve offered immediate relief to companies exposed to those product categories.
Strategists look ahead to 2026
The positive start to 2026 follows a robust performance for US equities last year.
The S&P 500 gained more than 16% in 2025, marking its third consecutive annual advance.
The Nasdaq Composite jumped more than 20%, while the Dow rose around 13%.
All three major benchmarks reached record highs during the year.
“It was a strong year overall thanks to continued economic growth, optimism around AI, and more central bank rate cuts,” strategists at Deutsche Bank wrote.
They added, however, that headline gains masked significant volatility, particularly in April, when tariff-related announcements triggered one of the sharpest two-day declines for the S&P 500 since World War II.
Despite the volatility, Wall Street strategists broadly expect further gains in 2026.
Not all outlooks are equally bullish. Piper Sandler’s chief market technician Craig Johnson holds a more cautious view, forecasting a roughly 5% gain for the S&P 500 in 2026, with a target of 7,150.
Johnson expects a volatile path through the year, describing a “jump, slump, and pump” pattern, with early momentum followed by a weaker middle stretch before a stronger finish after the November midterm elections.
As trading begins in earnest for 2026, investors appear willing to build on last year’s gains, while remaining mindful that the road ahead may prove uneven despite the optimistic start.
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