The S&P 500 Index ($SPX) (SPY) on Friday closed up +0.19%, the Dow Jones Industrials Index ($DOWI) (DIA) closed up +0.66%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed down -0.17%.  March E-mini S&P futures (ESH26) rose +0.17%, and March E-mini Nasdaq futures (NQH26) fell -0.19%.

Stock indexes settled mixed on Friday.  The S&P 500 and Dow Jones Industrial Average recovered from 2-week lows and finished higher, driven by strength in chipmakers and AI-infrastructure stocks.  However, stock gains were limited, and the Nasdaq 100 fell to a 2-week low amid weakness in megacap technology stocks.  Also, weakness in cybersecurity stocks and insurance companies limited gains in the broader market.  In addition, higher bond yields were a negative factor for stocks, as the 10-year T-note yield climbed to a 1.5-week high of 4.19% on Friday.

Strength in European stocks on Friday provided carryover support to US equity markets after the Euro Stoxx 50 rallied to a new record high.

The US Dec S&P manufacturing PMI was kept unrevised at 51.8, right on expectations.

The markets are discounting the odds at 15% for a -25 bp rate cut at the FOMC’s next meeting on January 27-28.

Overseas stock markets settled higher on Friday.  The Euro Stoxx 50 rallied to a new all-time high and closed up by +1.02%.  China’s Shanghai Composite and Japan’s Nikkei Stock 225 are closed today for the New Year’s Day holidays.

Interest Rates

March 10-year T-notes (ZNH6) on Friday closed down -7.5 ticks.  The 10-year T-note yield rose +2.0 bp to 4.187%.  Mar T-notes fell to a 1.5-week low on Friday, and the 10-year T-note yield rose to a 1.5-week high of 4.195%.  T-notes fell on Friday as inflation expectations rose, as the 10-year breakeven inflation rate climbed to a 2.5-week high of 2.264%.  Also, negative carryover from a slide in 10-year European government bond prices to 1.5-week lows on Friday weighed on T-notes. 

European government bond yields moved higher on Friday.  The 10-year German bund yield rose to a 1.5-week high of 2.910% and finished up +4.5 bp to 2.900%.  The 10-year UK gilt climbed to a 1.5-week high of 4.537% and finished up +5.8 bp on that high.

The Eurozone Dec S&P manufacturing PMI was revised downward by -0.4 to 48.4 from the previously reported 49.2.

The Eurozone Nov M3 money supply rose +3.0% y/y, stronger than expectations of +2.7% y/y and the highest in four months.

The UK Dec S&P manufacturing PMI was revised downward by -0.6 to 50.6 from the previously reported 51.2.

Swaps are discounting a 1% chance of a +25 bp rate hike by the ECB at its next policy meeting on February 5.

US Stock Movers

Chip makers and AI-infrastructure stocks moved higher on Friday to support gains in the overall market.  Sandisk (SNDK) closed up more than +15% to lead gainers in the S&P 500, and Micron Technology (MU) closed up more than +10% to lead gainers in the Nasdaq 100.  Also, ASML Holding NV (ASML) closed up more than +8% after Alethia Capital double-upgraded the stock to buy from sell with a price target of $1,500. In addition, Lam Research (LRCX) closed up more than +8%, and Intel (INTC) closed up more than +6%.  Finally,  Marvell Technology (MRVL) closed up more than +5%, and Western Digital (WDC), ARM Holdings Plc (ARM), Applied Materials (AMAT), KLA Corp (KLAC), Advanced Micro Devices (AMD), and Seagate Technology Holdings (STX) closed up more than +4%. 

Cryptocurrency-exposed stocks rallied on Friday as Bitcoin (^BTCUSD) rose more than +1%.  Riot Platforms (RIOT) closed up more than +11%, and Mara Holdings (MARA) and Galaxy Digital Holdings (GLXY) closed up more than +10%.  Also, Coinbase Global (COIN) closed up more than +4%, and Strategy (MSTR) closed up more than +3%. 

The Magnificent Seven stocks gave up early gains on Friday and turned lower, weighing on the broader market.  Tesla (TSLA) closed down more than -2% after reporting Q4 vehicle deliveries of 418,227, weaker than the consensus of 440,907.  Also, Microsoft (MSFT) closed down more than -2%, and Amazon.com (AMZN) and Meta Platforms (META) closed down more than -1%.  In addition, Apple (AAPL) closed down -0.34%.  However, Nvidia (NVDA) bucked the trend and closed up more than +1%, and Alphabet (GOOGL) closed up +0.69%. 

Cybersecurity stocks fell on Friday, weighing on the Nasdaq 100.  Atlassian (TEAM) closed down more than -4%, and CrowdStrike Holdings (CRWD) closed down more than -3%.  Also, Palo Alto Networks (PANW) closed down more than -2%, and Zscaler (ZS) and Fortinet (FTNT) closed down more than -1%.

Insurance stocks were under pressure on Friday. Progressive (PGR) closed down more than -6%, and Erie Indemnity (ERIE) closed down more than -3%.  Also, Allstate (ALL) closed down more than -2%, and American International Group (AIG) and Travelers (TRV) closed down more than -1%.

Sable Offshore (SOC) closed up more than +30% after a federal appeals court said the company can restart its California pipeline and can begin pumping oil from its three platforms off the coast of Santa Barbara, California.

RH (RH) closed up more than +8%, and Wayfair (W) closed up more than +6% after President Trump delayed tariff increases on upholstered furniture until next year. 

Vertiv Holdings (VRT) closed up more than +8% after Barclays upgraded the stock to overweight from equal weight with a price target of $200.

Earnings Reports(1/5/2026)

None.

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