Stay informed with free updates
Simply log in to US stocks myFT summary — delivered straight to your inbox.
Wall Street stocks rallied on Friday to end the first week of 2025 on an upbeat note amid fresh signs of stable manufacturing, halting days of losses.
The S&P 500 ended the day up 1.3 percent, posting its biggest gain since November 6 – a day after Donald Trumpvictory in the American elections. The benchmark’s gains on Friday also snapped five consecutive days of losses — the longest such streak since April.
The tech-heavy Nasdaq Composite added 1.8 percent, helped by a more than 8 percent gain in electric vehicle maker Tesla, whose shares slipped a day earlier after the announcement the 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 shortened week leading up to the New Year, which may bring a reduction in trading volume. Analysts noted that some investors were simply preparing for the “real” start of 2025 on Monday.
But today’s stock price moves also came as fresh reading on US manufacturing activity beat consensus forecasts, boosting investor sentiment, and as Trump ally Mike Johnson re-elected as Speaker of the US House of Representatives.
“It’s really a combination — I’ll call it a potpourri of different factors,” said Kristina Hooper, chief global markets strategist at Invesco. “First of all, we’ve seen some selling — and so at a certain point, I think investors are recognizing that there are buying opportunities created when you have multiple sell-off days.”
At the same time, Hooper added: “We have good news today in terms of production [figures] and I think that set a positive tone. We had relatively smooth elections in the House of Representatives, which also contributed to a more positive mood.”
Friday’s reading of the ISM manufacturing purchasing managers’ index fell to 49.3 for December — below the 50 threshold that marks expansion, but above economists’ forecasts and higher than November’s reading of 48.4.
“The S&P 500 saw a big increase as [investors] took solace in the orderly re-election of the Speaker of the US House of Representatives, as it helps reduce political uncertainty,” said Dec Mullarkey, managing director of SLC Management.
Referring to the group of big tech names that have come to dominate the US stock market, he added: “The Magnificent Seven, in particular, remain resilient even when valuations are high. Investors are still convinced that large expenditures for [artificial intelligence] the investment will pay dividends and ensure first mover advantage.”
Even after Friday’s sharp gains, the S&P and Nasdaq still posted small weekly losses.
Invesco’s Hooper believes the “overall environment is supportive of risk assets”, meaning “we are likely to have more positive days than negative days” as the new year progresses. However, “there could very well be more volatility,” she said.
“Let’s face it: there is more and more uncertainty as we get closer to January 20 [the day of Trump’s inauguration] I think there will be more question marks about what is likely to come from the new administration.”
Additional reporting by Will Schmitt
