Stocks Rebound on Wall Street as Tech and Energy Shares Soar
The US stock market closed higher on Friday, erasing a shaky start to the new year, as technology and energy shares drove the rally. The S&P 500 advanced 1.26% to 5,942.47, while the Dow Jones Industrial Average gained 0.8% to end the day at 42,732.13. The Nasdaq Composite soared 1.77% to 19,621.68.
Tech giants Nvidia and Super Micro Computer were among the biggest winners, surging 4.7% and 10.9% respectively. Shares of Constellation Energy and Vistra, two companies expected to benefit from continued spending on artificial intelligence, climbed 4% and 8.5%, respectively. Microsoft’s announcement of an $80 billion investment in AI-enabled data centers for fiscal 2025 also boosted confidence in the tech sector.
Jeremiah Buckley, portfolio manager at Janus Henderson Investors, believes that the “secular growth drivers” behind the market gains over the past two years remain strong. “I think they’re still on strong footing and will continue to drive those earnings gains,” he said on CNBC’s “Squawk on the Street”.
The rally marked a break from a five-day losing streak for the Nasdaq and S&P 500, but was not enough to salvage the week for the major averages. The S&P 500 and Dow both finished the week down, and the “Santa Claus” rally, which would have seen gains in the final five trading days of one year and the first two of the next, did not materialize.
However, market strategists like Mark Hackett at Nationwide Financial, believe that the weakness in stocks may be indicative of an “orderly” consolidation period rather than the beginning of a sharp downturn. “These are the days that you kind of have people just moving to the sidelines after what’s been a pretty tough last four weeks,” Hackett said.
