Major U.S. stock indexes experienced notable gains during the holiday-shortened trading week, with the S&P 500 reaching new record highs. The index finished the week with an increase of approximately 18% for the year, positioning it for its third consecutive year of double-digit returns. This surge in market performance came despite light trading volumes as investors remained optimistic heading into the new year.
Precious metals also attracted attention, with both silver and gold achieving new highs due to strong demand and ongoing supply constraints. The technology sector, particularly growth stocks, played a significant role in shaping market dynamics, as firms like Nvidia and Micron led the charge.
Technology Stocks Drive Market Momentum
Nvidia (NASDAQ:NVDA) emerged as a standout performer, buoyed by a pivotal licensing agreement with AI-chip start-up Groq. Analysts believe this partnership strengthens Nvidia’s competitive position in the market. Additionally, the company is set to commence shipments of its H200 AI chips to China by mid-February 2026, potentially reopening a vital market previously affected by export restrictions. This news sparked enthusiasm among investors and contributed to the overall strength of tech stocks.
Micron (NASDAQ:MU) continued its impressive performance, extending a year-long rally and securing a spot among the S&P 500’s top performers for 2025. Investor interest in technology stocks was further fueled by Apple CEO Tim Cook’s recent disclosure of a personal stock purchase in Nike (NYSE:NKE), which positively impacted shares in the apparel maker.
Sector rotation characterized trading activity as financial and cyclical stocks also attracted significant interest. Despite mixed market breadth, overall resilience was observed, with major indices logging weekly gains.
Mixed Signals from the Bears
While several stocks thrived, not all companies shared in the market’s success. Intel (NASDAQ:INTC) faced challenges as its shares slipped following reports that Nvidia had paused testing on its advanced AI chips using Intel’s 18A production process. This development was perceived as a setback for Intel’s manufacturing ambitions.
Additionally, Oracle (NYSE:ORCL) experienced a significant share decline, approximately 30%, over the quarter. Investor concerns revolved around the company’s aggressive spending on AI infrastructure, despite its adjusted earnings exceeding expectations. Analysts expressed caution regarding Oracle’s ability to balance rapid AI expansion with profitability amid heavy capital commitments.
In international news, tensions escalated as China imposed sanctions on multiple U.S. defense companies, including Boeing (NYSE:BA) and Northrop Grumman (NYSE:NOC). This retaliation followed the U.S. government’s approval of an $11 billion arms sale to Taiwan, a move that drew sharp criticism from Chinese officials.
Overall, the trading week highlighted a blend of optimism and caution, leaving investors focused on upcoming economic drivers, including Federal Reserve policy and earnings momentum across key sectors. As the year draws to a close, many eyes are set on 2026, anticipating how these factors will shape the market landscape.
For more insights and updates on stocks, Benzinga continues to provide daily reports on market movements and popular investment choices.
