U.S. stock indexes saw a marginal increase at the start of trading in 2026, with investors exercising caution after a strong year for stocks, while monitoring rising Treasury bond yields.
The S&P 500 closed up 0.2% after fluctuating between gains and losses, while the Nasdaq 100 fell 0.2% weighed down by technology stocks. Tesla shares fell after the company announced fourth-quarter deliveries below the average analyst forecast, and Amazon and Microsoft shares also fell, leading to a decline of about 1% in the Bloomberg Magnificent Seven Stock Index.
In contrast, some semiconductor equipment and chip stocks, such as Nvidia and Micron Technology, showed strength, in addition to gains in most energy companies and some industrial and utility stocks.
Bond yields remained under scrutiny, with the U.S. 10-year Treasury yield at around 4.19%, approaching its highest levels since “September”. Adam Turnquist of LPL Financial stated, “Stocks are faltering on takeoff as yield prices rise to uncomfortable levels,” adding that exceeding the 4.20% level could “generate an upward target near 4.50%.”
Precious metals gave up previous gains with gold falling and silver rising about 1.2%, while the dollar rose slightly, and Bitcoin rose 1.6%. Regarding the start of the year, a note from Bespoke Investment Group indicated that the average change for the S&P 500 at the start of the year since 1953 is a decrease of 0.3% with gains in less than half of the cases.
As for the outlook for 2026, Deutsche Bank explained that there are six axes that will affect the markets in addition to artificial intelligence, including developments in U.S. trade policies, especially a case before the Supreme Court regarding the legality of tariffs, with the Federal Reserve remaining the focus of attention amid expectations of naming a successor to Jerome Powell early. Barclays warned of fluctuations at record levels “overly reliant on the success of artificial intelligence”, despite expecting additional gains supported by consistent profits. In contrast, Bank of America strategists saw the “S&P 500” could reach 7100 points this year, taking a more cautious stance due to the intensity of capital spending at major technology companies, high multiples, and indicators of stress in the labor market. (Al-Sharq)
