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Stocks rose on Wall Street on Friday to close the first week of 2025 on an upbeat note amid new signs of stabilizing manufacturing, halting several days of losses.
The S&P 500 closed the day up 1.3 percent, marking its biggest rise since November 6 – the next day. Donald TrumpUS election victory. The benchmark index's gains on Friday also ended five straight days of losses – the longest such streak since April.
The Nasdaq Composite Index, dominated by technology stocks, added 1.8 percent, supported by a rise of more than 8 percent for electric car maker Tesla, whose shares fell the previous day after announcing its shares. First decline in annual vehicle deliveries In more than a decade. Semiconductor giant Nvidia advanced more than 4 percent.
The gains came at the end of a week shortened by New Year's Day, which may lead to lower trading volumes. Analysts noted that some investors were simply preparing for the “real” start to 2025 on Monday.
But today's stock price movements also came at a time when the new reading on US manufacturing activity exceeded consensus expectations, boosting investor sentiment, and while Trump ally Mike Johnson Re-elected as Speaker of the US House of Representatives.
“It's actually a mixture – I would call it a mixture of different factors,” said Christina Huber, chief global markets strategist at Invesco. “First of all, we've seen some selling — and so, at a certain point, I think investors realize that there are buying opportunities that are created when you have multiple days of selling.”
Meanwhile, Hopper added: “We've got some good news today in terms of manufacturing (numbers) and I think that definitely sets a positive tone. We had a relatively smooth election in the House of Representatives and it also helped contribute to more positive sentiment.
The ISM manufacturing PMI reading fell on Friday to 49.3 for December – below the 50 threshold that represents expansion, but above economists' expectations and above November's reading of 48.4.
“The S&P 500 saw a broad-based rally as (investors) took comfort in the orderly re-election of the Speaker of the US House of Representatives, as that helps reduce political uncertainty,” said Dick Mularkey, managing director at SLC Management.
Referring to the group of major technology companies that have come to dominate the US stock market, he added: “The Big Seven, in particular, remain resilient even with rising valuations. Investors remain confident that the large expenditures of investing in (artificial intelligence) will pay off.” It provides leadership advantage.
Even after Friday's sharp rise, the S&P and Nasdaq still posted small weekly losses.
Invesco's Hopper believes that “the overall environment is supportive for risk assets,” meaning that “we are likely to see more positive days than negative days” as the new year progresses. However, she said, “It is possible that there will be more volatility.”
“Let's face it: There is more uncertainty, and as we get closer and closer to January 20 (Trump's inauguration day) I think there will be more question marks about what could come from the new administration.”
Additional reporting by Will Schmidt
