U.S. stocks rebounded sharply on Friday, with Tesla (TSLA) and Nvidia (NVDA) powering a tech-led rally that provided a positive end to a tough opening week of 2025.
The S&P 500 (^GSPC) rose 1.3%, while the Dow Jones Industrial Average (^DJI) gained 0.8%. The Nasdaq Composite (^IXIC) led the charge, climbing 1.8% as technology stocks took the spotlight.
The rally marked the final day for the S&P 500 to secure a “Santa Claus” rally—a historical trend often seen as a bullish signal for January and the rest of the year. Despite Friday’s gains, the S&P 500 and Dow logged weekly losses of over 1%, while the Nasdaq ended the week down about 2%.
Tesla and Nvidia Lead the Recovery
Tesla shares surged 8% on Friday after the electric vehicle maker announced record-breaking sales in China for 2024. This sharp recovery came after a 6% drop on Thursday, driven by news of Tesla’s first global yearly sales decline.
Nvidia continued its winning streak, rising over 4% on Friday following a strong gain on Thursday. The chipmaker remains a key driver of the market’s optimism around artificial intelligence and technology.
US Steel Dips on Blocked Deal
Shares of U.S. Steel (X) fell 5% after President Joe Biden blocked Japanese firm Nippon Steel’s $14.9 billion acquisition of the company. The deal had faced mounting political scrutiny, reflecting broader tensions in the global steel market.
Manufacturing Data Reflects Economic Uncertainty
The Institute for Supply Management (ISM) reported that U.S. manufacturing activity remained in contraction territory in December. The Purchasing Managers Index rose slightly to 49.3%, up from November’s 48.4%, but remained below the 50-point mark that signals growth.
The report offered a mixed picture of the U.S. economy’s health and is likely to influence the Federal Reserve’s upcoming decision on interest rates. Investors are watching closely for signs of an economic slowdown that could prompt the Fed to consider rate cuts later in the year.
Broader Market Context
The week’s rebound in tech stocks underscores the sector’s continued influence on market sentiment. However, concerns about economic contraction and interest rate policy linger, creating uncertainty about whether the rally can be sustained.
As markets look toward key corporate earnings reports and economic data in the coming weeks, Friday’s gains provided a much-needed reprieve from the downbeat start to 2025.
