S&P 500: Nvidia Jumps, Alcohol Stocks Fall After Surgeon General’s Warning

Wall Street Rises as Tech Stocks Rebound, Policy Focus Sharpens

Wall Street’s major indexes climbed on Friday, with technology stocks leading the gains after a four-day losing streak. Investors prepared for potential policy adjustments as the incoming Trump administration’s economic direction remained in focus.

At 17:52 GMT, the Dow Jones Industrial Average is trading 42651.75, up 259.48 or +0.61%. The S&P 500 Index is at 5928.91, up 60.36 or +1.03% and the Nasdaq is trading 19547.63, up 268.83 or +1.38%.

All 11 sectors of the S&P 500 posted gains, spearheaded by a 1.7% increase in consumer discretionary stocks. Technology stocks followed closely, rising 1.5%, reversing losses from earlier sessions. Nvidia surged 4%, lifting the Dow, Nasdaq, and S&P 500.

The positive session came after a rough start to the year, with the S&P 500 and Nasdaq closing lower for five consecutive sessions. This pattern diverged from the historical tendency for markets to rally in late December and early January. Despite Friday’s upward move, the major indexes were still poised for weekly losses of around 1%.

How Are Investors Responding to Trump’s Policy Agenda?

Market sentiment remains mixed as investors assess the potential economic impact of Trump’s policy proposals. With Republicans controlling Congress, Trump’s agenda could drive growth through corporate tax cuts and deregulation. However, policies on tariffs and immigration bring inflation concerns.

Analysts believe a clearer market direction could emerge by late January once the new administration begins executing pro-business initiatives. Michael Matousek of U.S. Global Investors noted that bullish sentiment may rise as policies solidify.

Interest Rate Outlook and Economic Signals

Economic data continues to reflect resilience, with manufacturing activity showing signs of recovery. This has dampened expectations for aggressive interest rate cuts by the Federal Reserve. The CME Group’s FedWatch Tool suggests traders anticipate the first rate cut around May.

Treasury yields remain elevated, with the 10-year yield holding above 4.5%, signaling persistent inflationary pressures.

Equity Flows and Sector Performance

U.S. equity fund inflows declined sharply in the final week of December, reflecting investor caution. However, advancing stocks outpaced decliners by more than 2-to-1 on both the NYSE and Nasdaq, suggesting broader market strength.

In contrast, alcoholic beverage stocks faced selling pressure. Constellation Brands, Molson Coors, and Brown-Forman dropped following a call from the U.S. surgeon general to include cancer warnings on alcohol labels. U.S. Steel fell 6.4% after President Biden blocked Nippon Steel’s proposed acquisition.

Market Forecast: Cautiously Optimistic with Policy Clarity

The near-term outlook remains volatile, but the broader market could gain momentum if the Trump administration swiftly implements growth-oriented policies. Traders should monitor Treasury yields and inflation indicators, as they will shape rate expectations and influence market direction. A break above resistance levels for technology and consumer stocks may signal further upside in the weeks ahead.

More Information in our Economic Calendar.