Wall Street Opens 2025 on a Cautious Note Amid Volatility
Today marks the final day to extend New Year’s wishes as markets were closed on Wednesday for the holiday. Low-volume trading and a light news ticker contributed to a quieter week on Wall Street. As the new year approached, stocks faced challenges, and a dramatic decline disrupted the first trading day of 2025. Concerns linger around the Cboe Volatility Index (VIX) and high S&P 500 short interest. Despite last year’s significant gains, all three major indexes are set to close the week with losses.
Three Key Developments This Week
After a grim winter outlook, natural gas prices soared to two-year highs, initially boosting an exchange-traded fund (ETF) before a sudden drop.
Delivery figures for electric vehicles sparked interest, with Tesla (TSLA) leaving room for improvement while a major competitor captured more market share.
Wrapping up the week, President Joe Biden effectively halted the proposed U.S. Steel (X) and Nippon merger, causing a significant impact on U.S. Steel’s stock price.
Tech Sector Movements to Watch
In the tech arena, MicroStrategy (MSTR) added more Bitcoin (BTC) as the cryptocurrency attempts to reach $100,000. Warren Buffett and Berkshire Hathaway (BRK.A) increased their investments in VeriSign (VRSN), a prominent software stock. Additionally, Keith Gill (Roaring Kitty) ignited a retail trading boom surrounding Unity Software (U), while Synaptics secured a partnership with Alphabet (GOOGL) to enhance its internet of things (IOT) network.
Market Signals as We Begin the New Year
With the start of a new month and year, different signals are emerging, both positive and negative. This could be a good time to invest in Chipotle (CMG) stock and another media giant, while cautioning against drugmaker Pfizer (PFE). In the longer term, even though the SPX has recently enjoyed two years of strong gains, it doesn’t mean that growth can’t continue. Following the holiday break, earnings reports are set to resume, with blue chip Walgreens Boots Alliance (WBA) preparing to report next week.
The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.
