U.S. stocks opened slightly higher on Friday, kicking 2026 trading off to a muted start. Futures pointed to a cautious but constructive tone as investors digested solid gains from last year while positioning for what many expect to be another volatile stretch ahead.
Early trading showed the Dow Jones Industrial Average hovering near the flat line, while the S&P 500 and Nasdaq Composite edged slightly higher. Markets are coming off a roller-coaster 2025 that still delivered double-digit gains across major indexes, leaving investors balancing optimism for continued growth against elevated valuations and lingering macro risks.
Market Movers:
- Baidu (BIDU) +12%: Shares surged after the company said it plans to spin off its AI chip unit Kunlunxin and pursue a Hong Kong listing, a move viewed as unlocking value and aligning with China’s push for semiconductor self-sufficiency. Analysts pointed to the potential IPO as a catalyst for capital flexibility, prompting Jefferies to raise its price target while citing longer-term upside despite near-term revenue pressure.
- ASML Holding (ASML) +9%: The chip-equipment giant jumped after Aletheia Capital upgraded the stock, citing accelerating factory expansions and strong demand for advanced EUV tools tied to AI chip production. The firm highlighted improving visibility into capacity ramps as a key driver for renewed investor confidence.
- Vertiv Holdings (VRT) +8%: Shares climbed following a Barclays upgrade that framed the recent pullback as an attractive entry point. The bank said Vertiv has lagged other AI-exposed infrastructure names and could see earnings upside in 2026 as data-center power demand continues to rise.
- Under Armour (UA, UAA) +5%: The apparel maker rallied after UBS called the stock a turnaround opportunity, pointing to improving sales trends and margin recovery. Analysts said brand strength and better execution in North America could support a valuation re-rating over time.
- Rivian Automotive (RIVN) +3%: Rivian shares rose after the EV maker reported quarterly production and delivery figures broadly in line with expectations. Investors focused on the company’s progress toward launching its mass-market R2 SUV next year, seen as critical to improving scale and margins.
- Li Auto (LI) +3%: Shares rose after the company reported a sequential rebound in deliveries and crossed the 1.5 million cumulative delivery milestone. While year-over-year growth remains pressured, investors welcomed signs of stabilization and expanding international reach.
Investor Expectations for 2026
With the new year underway, investors are reassessing whether the forces that powered equities higher in 2025 can continue. Wall Street strategists expect earnings growth, easing financial conditions, and AI-driven capital spending to remain supportive, but warn that valuations leave less room for disappointment. The outlook is further complicated by policy uncertainty, including trade dynamics, geopolitical risks, and shifting expectations around fiscal priorities. As a result, many investors are entering 2026 positioned for continued gains but with a greater focus on selectivity and risk management.
AI Trade and Infrastructure Demand Stay in Focus
Technology and AI-linked stocks are once again setting the tone early in the year, with renewed enthusiasm following recent volatility. Demand for semiconductors, cloud infrastructure, and data-center power remains a central pillar of the bull case, even as investors debate whether spending levels can be sustained. Companies tied to the physical buildout of AI — from chipmakers to power and cooling providers — continue to attract attention as beneficiaries of long-term structural demand. At the same time, markets remain sensitive to any signs of slowing investment or margin pressure across the tech ecosystem.
Commodities and Policy Add Crosscurrents
Precious metals began 2026 near record levels after posting their strongest annual gains in decades, reflecting ongoing demand for inflation hedges and hard assets. Industrial metals also remain supported by electrification trends, AI infrastructure needs, and supply constraints. Meanwhile, the Federal Reserve looms large as investors await clarity on the path of interest rates and the eventual transition to a new Fed chair later this year. Markets are largely pricing in a pause early in the year, with expectations for cuts building further out.
Looking Ahead
As trading resumes in full next week, markets will test whether optimism around a fourth consecutive year of gains can withstand elevated valuations, policy uncertainty, and uneven global growth. Investors will be watching early economic data, corporate guidance, and Fed commentary for signals on whether 2026 delivers a continuation of the rally — or a more volatile and selective market environment.