Major U.S. stock indexes opened 2026 on a strong note, posting gains of roughly 2% in the first full trading week of the year. The S&P 500 and Dow pushed past record highs set just two weeks earlier, while the NASDAQ advanced to within 1.2% of its all-time peak reached more than two months ago.
Friday’s employment report added to signs of a cooling labor market. The economy added 50,000 jobs in December, falling short of expectations, and payroll figures for the prior two months were revised lower by a combined 76,000. For 2025 as a whole, job growth averaged 49,000 per month—less than one-third of the 168,000 monthly average recorded in 2024.
Small-cap stocks significantly outpaced large caps. The Russell 2000 rose 4.6% for the week, surpassing a record high set four weeks earlier. Over the past six weeks, the index has climbed nearly 14%.
Precious metals rebounded from the previous week’s pullback, extending rallies that gained momentum early in 2025. Gold traded above $4,520 per ounce on Friday afternoon, near a record set two weeks earlier. Silver crossed the $80-per-ounce mark for the first time on Tuesday and finished the week just below that high.
Oil markets were volatile amid a steady stream of geopolitical developments. U.S. crude prices dipped to about $56 per barrel on Wednesday before rebounding to nearly $60 on Friday, ending the week up more than 3%.
Consumer sentiment continued to improve. The University of Michigan’s preliminary January reading rose to 54.0 from December’s final 52.9, marking a second consecutive monthly increase and the highest level in four months after a stretch of declines tied to weaker job growth.
Dividend growth also picked up late last year. S&P 500 companies recorded $13.1 billion in net dividend increases in the fourth quarter, well above the $10.6 billion logged in the prior quarter, according to S&P Dow Jones Indices. The firm expects a robust pace of dividend hikes in the first quarter of 2026, supported by record earnings and sales.
Looking ahead, investors will focus on Tuesday’s Consumer Price Index release to assess whether the recent easing in inflation continued into December. The most recent CPI report showed inflation running at a 2.7% annual rate in November, well below the 3.1% consensus estimate.