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Stocks Get Tech Boost as US Dollar Trims Selloff: Markets Wrap

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Stocks Get Tech Boost as US Dollar Trims Selloff: Markets Wrap

(Bloomberg) — A rally in the world’s largest technology companies lifted stocks at the start of the first full trading week in 2025. The dollar trimmed losses after President-elect Donald Trump said his tariff policy plan won’t be pared back.

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Almost every major group in the S&P 500 advanced, with Nvidia Corp. leading gains in megacaps ahead of Monday’s speech from chief Jensen Huang. The yield on US 30-year bonds hit the highest since late 2023 as the Treasury market prepares for $119 billion of debt issuance this week. A Bloomberg gauge of the greenback pared a slide of as much as 1% as Trump denied a Washington Post report that he would consider applying a tariff to all countries but be limited to specific critical imports.

“2025 should see a volatile market,” said Paul Nolte at Murphy & Sylvest Wealth Management. “The large swings may provide opportunities for both buyers and sellers in 2025.”

Wall Street traders are also gearing up for Friday’s key jobs report, which is expected to show US employers tempered their hiring last month to wrap up a year of moderating yet still-healthy labor market. The report is unlikely to alter the view of Federal Reserve officials that they can slow the pace of rate cuts amid a durable economy and inflation that’s dissipating only gradually.

The S&P 500 rose 1.1% to around 6,000. The Nasdaq 100 added 1.4%. The Dow Jones Industrial Average gained 0.7%. A Bloomberg gauge of the “Magnificent Seven” megacaps” climbed 1.5%. The Russell 2000 index of smaller firms advanced 0.9%.

The yield on 10-year Treasuries advanced three basis points to 4.63%. The Bloomberg Dollar Spot Index fell 0.6%. The loonie rose as much as 1.2% on news reports that Justin Trudeau will announce he plans to resign as leader of Canada’s Liberal Party.

A rally in US stocks this year will be driven mainly by corporate earnings, according to Goldman Sachs Group Inc. strategists led by David Kostin, who expect the S&P 500 to hit 6,500 points by end-2025.

US equities could face a tough six months ahead, according to Morgan Stanley strategists led by Michael Wilson.

The correlation between the S&P 500 and bond yields has turned “decisively negative” as the 10-year Treasury yield climbed above 4.5%, they noted.

“We think 2025 could be a year of two halves,” the strategists wrote, with market-friendly policies such as potential tax cuts likely to shore up stocks later in the year. The team in November issued a 12-month target of 6,500 points for the S&P 500.

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