FX.co ★ US Stocks Start Year Mostly Higher

US stock markets ended the day mostly higher after experiencing significant volatility in the year's first trading session. This turbulence underscores the market's ongoing apprehension about whether AI software providers have overstated their commitments to capital expenditure in AI. The Dow Jones Industrial Average surged by 370 points, buoyed by the robust performance of the core sectors of the economy. Meanwhile, the S&P 500 edged up by 0.3%, and the Nasdaq 100 closed unchanged. Chip manufacturers saw substantial gains, propelled by favorable corporate news within the industry. Nvidia advanced 2%, and both Micron and Intel soared by 10% and 7%, respectively. In a notable announcement, Baidu revealed its plan to initiate an IPO for its AI chip division in Hong Kong. Concurrently, asset managers raised their outlook for ASML. Furniture manufacturers also saw gains following President Trump's decision to postpone tariffs on inputs, leading to a 6% rise for Wayfair and an 8% increase for RH. Conversely, AI software companies took a hit, with shares of Microsoft, Meta, Amazon, and Palantir declining between 2% and 5%. Additionally, Tesla's stock fell by 2.5% after the company failed to meet its delivery goals in the fourth quarter. The broader market was supported by expectations of strong economic growth and an anticipated reduction in interest rates by the Federal Reserve this year.