On January 5th (local time), the three major U.S. stock indices closed higher collectively. The Dow Jones Industrial Average rose 594.79 points, or 1.23%, to 48,977.18 points, hitting a record high; the S&P 500 Index climbed 0.64% to 6,902.05 points, and the Nasdaq Composite Index gained 0.69% to close at 23,395.82 points. Tech stocks showed divergent performance: Tesla and Amazon rose more than 3%, while Apple edged down 1%. Most popular Chinese concept stocks moved higher, with KE Holdings jumping over 6% and NIO falling more than 5%.

Behind the market rebound, the direction of Federal Reserve monetary policy has become the core focus of speculation. At the previous FOMC meeting, the Fed approved a 25-basis-point interest rate cut by a 9-3 vote, but divisions among committee members persisted. Federal funds rate futures pricing shows that market expectations for rate cuts in January, March, and April have all declined, with the current consensus being that the next rate cut may occur in April. Charles Schwab analysts pointed out that the recent U.S. stock pullback may be related to year-end tax-loss selling and the rise in long-term U.S. Treasury yields. Going forward, it is crucial to pay attention to key data releases this week, such as the ADP Employment Report and Nonfarm Payrolls Report, which will outline the full picture of the labor market and may exacerbate market volatility.

Market views on the 2026 U.S. stock trend are divided. On the one hand, continuous investment in the artificial intelligence sector and strong corporate profitability are expected to boost the market; on the other hand, expectations of a change in the Fed chair and macroeconomic uncertainty still cast a shadow over the short-term trend. Dick, chief strategist at Stock Trader Network, predicts that interest rates may drop sharply in the second half of the year, benefiting stocks across all sectors.