NEW YORK (AP) — U.S. stock indexes are drifting in erratic trading on Thursday to start 2025.
The S&P 500 was up 0.1% in midday trading after flipping between an earlier loss of 0.1% and gain of 0.9%. It's coming off a four-day losing streak, its longest since early September, which dimmed the end of its stellar 2024.
The Dow Jones Industrial Average was down 14 points, or less than 0.1%, as of 11:15 a.m. Eastern time, after an earlier gain of 360 points disappeared. The Nasdaq composite was 0.2% higher.
Stocks of the smallest companies were among the market's strongest, as they often are when optimism is rising about the U.S. economy. They can get a larger benefit than big multinationals, and the Russell 2000 index of small stocks rose 0.7% after a report said fewer U.S. workers applied for unemployment benefits last week than economists expected.
It's the latest signal that the job market remains remarkably solid despite high interest rates brought by the Federal Reserve in recent years to stifle inflation. After surprising doubters by avoiding a recession last year, the hope is that the U.S. economy can continue growing in 2025 after the Fed reduced the pressure on it by recently lowering interest rates.
Also at the head of the market were some Big Tech stocks, which have been leading Wall Street for most of the last few years. Nvidia, whose chips are powering the world’s move into artificial-intelligence technology, rose 2.2% after following up its nearly 240% surge in 2023 with a better than 170% jump last year.
Some investors and analysts are counting on the AI rush to continue, even though critics say it’s sent prices for some stocks too high too quickly. As the calendar flips to a new year, Wedbush analyst Dan Ives says it’s the ”same tech playbook in year 3 of this tech AI driven bull market,” for example.
Such optimism, of course, can also make contrarians feel nervous.
A measure of how heavily Wall Street analysts are recommending stocks is at its highest level since early 2022, according to Bank of America strategist Savita Subramanian. She says the measure has been a reliable contrarian indicator in the past, and it’s just a bit shy of triggering a signal to sell for those who are leery when much of Wall Street rushes in the same direction.
One member of the group of vaunted Big Tech stocks known as the “Magnificent Seven,” Tesla, slumped after it disclosed it delivered fewer vehicles in the last three months of 2024 than analysts expected. The electric-vehicle company’s stock fell 5.7%.
In the bond market, Treasury yields were mixed. The yield on the 10-year Treasury edged down to 4.56% from 4.57% late Tuesday.
In stock markets abroad, indexes fell 2.2% in Hong Kong and 2.7% in Shanghai after a survey of factory managers showed Chinese activity expanding at a slower pace in December. New orders, employment and business sentiment weakened.
Upbeat talk by Chinese leader Xi Jinping in a New Year’s address did little to raise optimism among investors who are hoping for more aggressive action to support the world's second-largest economy and boost stock prices.
“We have adopted a full range of policies to make solid gains in pursuing high-quality development. China’s economy has rebounded and is on an upward trajectory,” Xi said in a New Year message, according to the official Xinhua News Agency.
Stock indexes were mixed elsewhere in Asia and Europe.
Commodity prices rallied. A barrel of benchmark U.S. crude oil rose 2.5% to $73.54, while Brent crude, the international standard, gained 2.1% to $76.21.
Natural gas climbed 2.4%, and gold added 1% to $2,667.70 per ounce.
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AP Business Writer Yuri Kageyama contributed.
