Stocks rise on Wall Street as AI stocks turn higher again

Tech Sector Drives Wall Street Gains, Wiping Out Early Week Losses

Stocks rebounded on Wall Street Friday, with the technology sector leading the charge for a second consecutive day, erasing losses from earlier in the week.

The S&P 500 rose 59.74 points, or 0.9%, closing at 6,834.50 and securing a modest 0.1% gain for the week. The Dow Jones Industrial Average added 183.04 points, or 0.4%, to finish at 48,134.89. Meanwhile, the technology-heavy Nasdaq made the most substantial move, climbing 301.26 points, or 1.3%, to 23,307.62, ending the week up 0.5%.

Nvidia continued to be the market’s primary catalyst, surging 3.9%, while Broadcom jumped 3.2%. These artificial intelligence-focused companies have been instrumental in driving Wall Street’s performance throughout the year, though their lofty valuations have increasingly come under scrutiny as investors question whether their stock prices are justifiable.

Oracle shares climbed 6.6% following news of its involvement in a new TikTok U.S. joint venture. Oracle, Silver Lake, and MGX each secured a 15% stake in the popular social video platform, ensuring its continued operation in the United States amid regulatory concerns.

Corporate earnings reports revealed mixed results across different sectors. Nike slumped 10.5% as tariff impacts overshadowed an otherwise strong quarterly profit report. Similarly, frozen potato manufacturer Lamb Weston plunged 25.9%, despite beating Wall Street’s profit and revenue forecasts.

In contrast, recreational vehicle manufacturer Winnebago Industries jumped 8.4% after reporting quarterly profits and revenue that easily exceeded analyst expectations, highlighting the uneven nature of consumer spending across different market segments.

The housing sector faced pressure following reports that home sales slowed from a year earlier for the first time since May. KB Home was particularly hard hit, falling 8.5% as investors responded to signs of weakness in the residential real estate market.

Consumer sentiment remains a concern for the broader economy. The University of Michigan’s survey showed only slight improvement in December compared to November, but sentiment remains nearly 30% below December 2024 levels. “Pocketbook issues continue to dominate consumer views of the economy,” noted Joanne Hsu, Director of Surveys of Consumers.

This weakening confidence comes amid persistent inflation pressures squeezing household budgets, a slowing job market, and weakening retail sales. Both businesses and consumers are also increasingly worried about the impact of wide-ranging U.S.-led trade tensions with key partners including China and Canada.

Thursday’s inflation update showed an unexpected cooling of prices in November, with the Labor Department reporting that its consumer price index rose 2.7%. However, economists quickly cautioned that these figures may be distorted due to delays caused by the recent 43-day federal shutdown.

“The wave of economic data did little to provide clarity for investors this week, keeping the market in the trading range it has been in since September,” said Mark Hackett, chief market strategist at Nationwide, in a note to investors.

Inflation remains above the Federal Reserve’s 2% target, creating a policy dilemma. The central bank cut its benchmark interest rate at its most recent meeting due to concerns about the slowing job market, but further rate cuts could potentially fuel inflation, which might stunt economic growth.

The Fed has maintained a cautious stance on interest rate policy heading into 2026, and market participants are largely anticipating that rates will remain unchanged at the January meeting.

In the bond market, Treasury yields edged higher, with the 10-year Treasury yield rising to 4.15% from 4.11% late Thursday.

International markets also showed strength. Japanese stocks rose after the Bank of Japan raised its benchmark interest rate to its highest level in 30 years, with the Nikkei 225 gaining 1%, leading advances across key Asian markets. European markets likewise posted gains.

As 2025 draws to a close, investors remain focused on balancing economic growth concerns with persistent inflation pressures, while keeping a close eye on corporate performance amid challenging global trade conditions.