U.S. stocks are starting 2026 in a similar fashion to 2025.
Artificial intelligence stocks jumped in early trading Friday, while the rest of the market was mixed. The tech-heavy Nasdaq was about 0.4% lower, while the broader S&P 500 was down 0.2% and the Dow Jones Industrial Average ticked up about 0.1%.
The AI boom, which fueled much of investors’ stock gains in 2025, is likely to remain a major theme for markets in the year ahead, albeit one that is the subject of ongoing skepticism. Analysts are also looking to global growth and the likelihood of falling interest rates as likely to boost U.S. stocks.
“Most financial assets had a decent performance in 2025, with global equities, bonds, credit and [emerging market] assets all having a strong year,” Jim Reid, Deutsche Bank’s global head of macro research and thematic strategy, wrote Friday.
“That was driven by continued global growth, ongoing optimism around AI’s potential, and further central bank rate cuts.”
Wall Street analysts generally concur. Every analyst polled in a Bloomberg survey, from those at major global banks to smaller firms, predicted that the S&P 500 will rally, with the consensus of a 9% increase for the year. A gain of that magnitude would be only slightly less than the index’s average return over the last 20 years. As of Dec. 29, not a single one predicted that the S&P 500 will decline on an annual basis.
For 2025, the S&P 500 posted a gain of more than 16%, even with turbulence related to President Donald Trump’s sweeping global trade policies earlier in the year. But the exploding AI sector helped the index lock in its third straight year of positive returns.
Many AI-related companies started the year’s trading with gains. Sandisk, Micron, Western Digital, Intel and Constellation Energy all accounted for the top gainers in early trading. Those moves were fueled by news overnight about two AI IPOs in Asia and a paper published by China’s DeepSeek which laid out how AI could potentially be developed in a more efficient manner.
Trillion-dollar tech firms Nvidia, Broadcom and Taiwan Semiconductor also jumped Friday morning.
Home furnishing sellers RH (formerly Restoration Hardware) and Wayfair also jumped in early trading after Trump delayed a wave of tariffs that were set to kick in New Year’s Day. Those duties would have applied to upholstered furniture, kitchen cabinets and vanities.
Precious metals such as gold and silver, which posted their best annual gain since the 1970s in 2025, also began the day slightly higher. Gold rose 0.2% and silver surged almost 3%.
In a positive sign for consumers, WTI crude oil dropped almost 1% and Brent, the international crude oil benchmark, dropped about 0.8%. Crude oil posted its biggest annual drop since 2020 last year, which played a significant role in falling gas prices. On Friday morning, AAA reported that the average price at the pump had fallen to $2.83 per gallon, down from $3.06 a year earlier.
Despite the strong gains in stocks, volume is likely to be light Friday. The weeks around the holiday season and new year are typically some of the thinnest trading.
Despite 2025’s strong gains, U.S. equities still underperformed international stocks by the widest margin since 2009. The S&P’s 16% gain in 2025 was trounced by a more than 30% gain by the MSCI All Country World ex USA index, which measures the global stock market’s performance excluding U.S. stocks. Some markets soared even more than that.
South Korea’s Kospi benchmark surged 76% thanks to the likes of electronics giant Samsung and AI-linked chipmaker SK Hynix. Japan’s Topix, Germany’s DAX and the U.K.’s FTSE 100 also saw gains of more than 20%.
The Topix’s gain was helped by the world’s best-performing stock last year, a memory supplier called Kioxia, which surged 540%, just one sign of the AI boom’s insatiable appetite for computing power.
Still, Bank of America senior U.S. economist Aditya Bhave warns that “we have this really interesting dichotomy between the soft labor data…and the strength of the consumer.”
“It’s kind of like we’re balanced on a knife edge, and we have to figure out which way it’s going to tip,” he said.
Bank of America cautiously projects the S&P 500 will rise only about 3.7% from where it ended 2025.
“Not as exciting as what we’ve enjoyed for the last few years, but still, you know, lots of pockets for real strong upside,” said Savita Subramanian, Bank of America’s head of U.S. equity strategy.