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Wall Street stocks rose on Friday on new signs of manufacturing stabilization, ending the first week of 2025 on a positive note, ending several days of declines.
The S&P 500 ended the day up 1.3%, its biggest gain since November 6, the day after Donald Trump won the US presidential election. Friday’s rise in the benchmark index also ended a five-day losing streak, the longest since April.
The technology-heavy Nasdaq Composite Index rose 1.8%, helped by electric car maker Tesla’s more than 8% rise. Tesla shares fell a day earlier after the company announced its first decline in annual vehicle deliveries in more than a decade. Semiconductor giant Nvidia rose more than 4%.
The rally comes at the end of a shortened week leading up to New Year’s Day, which could result in lower trading volumes. Analysts noted that some investors were simply preparing for Monday’s “real” start to 2025.
However, the day’s stock price movements were driven by new information on U.S. manufacturing activity that exceeded consensus expectations and boosted investor sentiment, as well as by President Trump’s ally Mike Johnson becoming Speaker of the U.S. House of Representatives. He was also re-elected.
“It’s really a combination. I’d call it a conglomeration of factors,” said Christina Hooper, chief global market strategist at Invesco. “First of all, we’ve seen some selling. So at some point, I think investors realize that after a few days of selling, it creates a buying opportunity.”
At the same time, Hooper added: [figures] I think it definitely creates a positive vibe. The relatively smooth run of the Lok Sabha elections also contributed to more positive sentiment. ”
The ISM Manufacturing Purchasing Managers Index released on Friday was 49.3 in December, below the 50 mark indicating economic expansion, but above economist expectations and above November’s 48.4.
“The S&P 500 had a broad rally. [investors] “We are relieved by the orderly re-election of the Speaker of the U.S. House of Representatives as it helps reduce political uncertainty,” said Dec Malarkey, Managing Director of SLC Management.
“The Magnificent Seven, in particular, has remained resilient despite soaring valuations,” he said, referring to the group of Big Tech companies that have come to dominate the U.S. stock market. I am confident that it is possible. [artificial intelligence] Investments pay dividends and secure first-mover advantage. ”
Even after Friday’s surge, the S&P and Nasdaq still posted modest losses for the week.
Invesco’s Hooper believes that “the overall environment is supportive of risk assets,” meaning that “there are likely to be more positive days than negative” as the new year progresses. But “there’s a good chance we’ll see more volatility,” he said.
“To be honest, the uncertainty is increasing as we get closer to January 20th.” [the day of Trump’s inauguration] There will be further question marks about what the new government will bring. ”
Additional reporting by Will Schmitt
