The first trading session of 2026 picked up right where 2025 left off: with solid gains and investors seemingly content to ride the momentum. U.S. stocks settled mostly higher on Friday, with the Dow Jones index gaining more than 300 points during the session. Key chip stocks, including Nvidia (NVDA) and Micron Technology (MU), gained during the session.
The rally comes after stocks recorded sharp gains in 2025, with the S&P 500 surging 16.39% for the year, recording its third consecutive double-digit annual surge. The Nasdaq Composite gained 20.36%, while the Dow added 12.97% in 2025. Not a bad foundation to build on.
Meanwhile, the CNN Money Fear and Greed Index showed almost no change in overall market sentiment, remaining firmly in the "Neutral" zone on Friday. At a current reading of 44.6, the index stayed in neutral territory versus a prior reading of 44.8. So investors aren't panicking, but they're not exactly euphoric either.
What Actually Moves Markets
Most sectors on the S&P 500 closed on a positive note, with energy, industrials, and materials stocks recording the biggest gains on Friday. However, consumer discretionary and communication services stocks bucked the overall market trend, closing the session lower.
The Dow Jones closed higher by around 319 points to 48,382.39 on Friday. The S&P 500 gained 0.19% to 6,858.47, while the Nasdaq Composite declined 0.03% at 23,235.63 during Friday's session.
On the economic data front, the S&P Global manufacturing PMI fell to 51.8 in December from 52.2 in the previous month, suggesting some modest cooling in manufacturing activity.
Not everyone had a good day, though. Outlook Therapeutics, Inc. (OTLK) shares dropped over 58% on Friday after the company announced that the FDA has issued a complete response letter to the ONS-5010/LYTENAVA biologics license application resubmission, indicating that the FDA cannot approve the application in its present form for the treatment of wet age-related macular degeneration. Ouch.
Understanding the Fear and Greed Index
The Fear & Greed Index is a measure of current market sentiment based on the premise that higher fear exerts pressure on stock prices, while higher greed has the opposite effect. The index is calculated based on seven equal-weighted indicators and ranges from 0 to 100, where 0 represents maximum fear and 100 signals maximum greediness.
