Dow, S&P 500 aim for records as early 2026 rally builds steam

Qualcomm (QCOM) shares rose nearly 4% in midday trading Tuesday after the chipmaker on Monday unveiled its latest PC chip for Microsoft (MSFT) laptops.

The gain Tuesday extends the previous day’s 2% jump, putting the stock up more than 5% over the past five trading sessions.

Qualcomm’s latest PC chip is part of the company’s broader push to expand beyond making chips for smartphones, as its second-largest customer Apple (AAPL) is shifting toward making key iPhone components internally.

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On Monday, the stock market largely brushed off the weekend developments that saw the US capture and arrest Venezuela’s Nicolás Maduro.

“The positive response in stocks is fascinating,” Yardeni wrote. “It suggests the markets are not particularly concerned. The market seems to be focusing on the positive consequences — peace through strength. Maybe that’s what markets are rooting for.”

Wall Street is still assessing the fallout from the US incursion into Venezuela. But at least to start, investors are looking past it to focus on the themes that have dominated markets throughout 2025 — and even earlier — with the AI trade returning to rally mode and focus looming on the Federal Reserve and corporate earnings.

Asked how the current climate would impact his holdings, Gabelli Funds portfolio manager John Belton said not much.

“I think that’s why the market is so, quote unquote, shrugging it off — this situation — at least as given what we know today,” he told Yahoo Finance. “Not a big impact on company fundamentals … not a big part of the global economy. I think that it’s pretty straightforward.”

Ben Emons, founder and chief investment officer of FedWatch Advisors, suggested investors may even be treating the moment as a “risk-on” event.

“2026 kicks off as a geopolitical year, which could act as a risk-on catalyst in subsequent periods,” Emons wrote in a note to clients. “It reminds me of 2016, when regime shifts like Brexit and Trump’s first election triggered significant rallies in commodities, emerging markets, and domestic equities.”

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Yahoo Finance’s Pras Subramanian reports:

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HVAC companies Johnson Controls (JCI), Trane Technologies (TT), and Carrier Global (CARR) saw their stocks drop on Tuesday amid investor concerns that Nvidia’s (NVDA) latest Vera Rubin AI systems could potentially reduce data centers’ demand for their offerings.

Commentary from Nvidia CEO Jensen Huang at CES in Las Vegas on Monday suggested that Vera Rubin will use liquid cooling rather than cooling systems offered by traditional HVAC companies — representing a potential headwind for those businesses.

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Fresh economic data on Tuesday showed the US services sector — which employs the majority of Americans — growing at its slowest pace in eight months during December.

S&P Global’s US Services PMI came in at 52.5 in December, below the preliminary reading of 52.9 earlier that month, which was expected to remain unchanged by economists tracked by Bloomberg.

The initial Services PMI reading in mid-December had already shown the index hitting a six-month low, and Tuesday’s reading marked a further slowdown. The index reflects changes in businesses’ costs, employment, and demand. A reading above 50 signals expansion in the services sector, while one below that figure indicates contraction.

“Confidence has been dampened principally by uncertainty over government policy and the broader economic outlook, with tariffs and affordability featuring as common threads throughout companies’ more cautious views on their prospects,” wrote Chris Williamson, chief business economist at S&P Global Market Intelligence.

US stocks stalled at the market open on Tuesday after broad gains on Monday that saw the Dow Jones Industrial Average (^DJI) surpass 49,000 for the first time.

The Dow was roughly flat following the previous session’s record-setting gain. The S&P 500 (^GSPC) also hovered around the flat line, while the tech-heavy Nasdaq Composite (^IXIC) nudged up 0.3%.

Investors are awaiting fresh economic data, with Tuesday marking the final S&P Global reading on US services activity in December, set for release at 9:45 a.m. ET.

Vistra (VST) stock rose 4% premarket on Tuesday following the news it had agreed to buy Cogentrix Energy for $4.7 billion amid surging power demand for AI data centers.

Novo Nordisk (NVO) stock climbed almost 5% before the bell on Tuesday after the company announced on Monday that patients will now be able to purchase the lowest doses of its Wegovy pill for $149 per month in the US starting in April.

Microchip Technology (MCHP) stock rose 4% during premarket trading after the tech company raised its forecasts for third quarter net sales on Monday.

Under Armour (UAA) shares rose almost 3%, after a filing revealed that Fairfax Financial Holdings (FFH.TO) owned just under 42 million shares, representing a 22% stake in the company.