Wall Streets Kicks Off 2025 on Positive Note With Stock Gains

U.S. stock indexes opened the new year with modest gains on Thursday, showing restrained movement as investors gauge the economic landscape for 2025. Why It Matters Despite some December losses that pared back the year’s gains, Wall Street had a record-breaking year in 2024. The S&P 500 slipped 0.4 percent to cap the year, gaining 23.3 percent overall and marking its second consecutive year of 20 percent-plus growth, a feat not seen since 1998. This comes after Wall Street rallied with a strong performance in a holiday-shortened trading session last month that was led by the technology sector. What To Know The S&P 500 climbed 0.3 percent shortly after markets opened on Thursday, positioning itself to snap a four-day losing streak that ended an otherwise strong 2024. By 9:35 a.m. ET, the Dow Jones Industrial Average had gained 226 points, or 0.5 percent, while the Nasdaq composite edged up 0.2 percent. Tech Stocks Big Tech stocks continued to dominate, maintaining a trend that has defined recent years. Nvidia, a key player in the artificial intelligence revolution with its cutting-edge chips, advanced 1.5 percent in early trading. The company extended its extraordinary momentum, building on a nearly 240 percent gain in 2023 with a further surge of more than 170 percent in 2024. Wall Street remains bullish on artificial intelligence, with some investors betting the AI boom will persist despite concerns that it has driven certain stock prices up too sharply and too fast. Wedbush analyst Dan Ives described the outlook as following the “same tech playbook in year 3 of this tech AI driven bull market” as markets begin the new year. A trader works at his desk on the floor of the New York Stock Exchange (NYSE) during the first session of the new year on January 2, 2025, in New York City. Wall Street kicked… A trader works at his desk on the floor of the New York Stock Exchange (NYSE) during the first session of the new year on January 2, 2025, in New York City. Wall Street kicked off the 2025 New Year on a positive note with some stock gains. TIMOTHY A. CLARY/AFP via Getty Images/Getty Images The wave of optimism sweeping Wall Street is leaving contrarian investors increasingly uneasy. Wall Street analysts’ enthusiasm for stocks has reached its highest point since early 2022, according to Bank of America strategist Savita Subramanian. Her proprietary measure, which has historically served as a reliable market gauge, is nearing a threshold that could signal contrarians to sell. Tesla Stocks Slip Tesla, part of the elite “Magnificent Seven” Big Tech stocks, stumbled after reporting lower-than-expected vehicle deliveries for the final quarter of 2024. Shares of the electric-vehicle giant dropped 5.5 percent following the announcement. Treasury yields edged lower, offering some relief to the stock market. The 10-year Treasury yield slipped to 4.53 percent, down from 4.57 percent at the close on Tuesday. Positive Unemployment Report A morning report revealed that fewer Americans filed for unemployment benefits last week than economists had anticipated, reinforcing signs of a robust job market. Defying expectations of a recession in 2024, the U.S. economy showed resilience, and hopes are high that growth will persist into 2025. The Federal Reserve’s decision to ease interest rates has further alleviated economic pressures, fueling optimism for the year ahead. In contrast to robust U.S. economic data, China reported signs of cooling in its manufacturing sector, unsettling Asian markets. The Caixin China Purchasing Managers Index revealed slower factory growth in December, with declines in new orders, employment, and business sentiment. The news sent stock indexes tumbling, with Hong Kong falling 2.2 percent and Shanghai dropping 2.7 percent. What People Are Saying According to CNBC, UBS strategist Jonathan Golub said in a note to clients: “…[I]t is clear that investors are extremely optimistic as we enter 2025. Maybe this exuberance is reason for concern. Maybe 2025 will be another gangbuster year.” What’s Next Stock indexes showed a mixed performance across Asia and Europe, reflecting varied investor sentiment in global markets. Commodity markets surged, with crude oil, natural gas and gold all posting gains. Wall Street will also be closed on January 9 to observe a National Day of Mourning to honor former President Jimmy Carter, who passed away on Sunday at age 100. This article includes reporting from The Associated Press.