Stock market update: What drove the S&P 500 and Dow to reach new record closing highs today

U.S. Stock Markets Begin 2026 with Record Highs

American equities kicked off 2026 on a strong note, as both the S&P 500 and the Dow Jones Industrial Average closed at all-time highs. Investors appeared to set aside concerns about recent events in Venezuela and other geopolitical uncertainties, instead turning their attention to economic indicators and company updates.

Bret Kenwell, an investment analyst at eToro, remarked, "Although it's still early in the year, the market seems largely unfazed by developments in South America."

The S&P 500 advanced 0.62%, gaining 42.77 points to close at a record 6,944.82. The Dow climbed 0.99%, or 484.90 points, finishing at 49,462.08—marking its first-ever close above 49,000. Meanwhile, the Nasdaq Composite, known for its technology focus, rose 0.65% (151.351 points) to end at 23,547.173.

Chris Larkin, managing director of trading and investing at E*TRADE from Morgan Stanley, commented, "While the calendar reads 2026, many of last year's trends are still in play. With markets largely brushing off geopolitical risks, the spotlight this week may be on whether technology stocks can regain momentum after a weak finish to 2025."

Technology Sector Surges Following CES Announcements

Shares of memory and storage companies soared after Nvidia CEO Jensen Huang introduced new artificial intelligence processors featuring advanced storage technology at the annual Consumer Electronics Show in Las Vegas.

SanDisk shares skyrocketed by 27.56%, Western Digital gained 16.77%, Seagate Technology increased by 14%, and Micron Technology rose 10.04%. All four companies reached new record highs.

Jed Ellerbroek, portfolio manager at Argent Capital, expressed optimism: "I anticipate a robust earnings season for major technology firms." He also expects these companies to announce further investment plans during their upcoming earnings reports.

The next round of earnings, covering the final quarter of 2025, is set to begin next week.

Energy Shares Rally Despite Oil Price Decline

Oil prices fell by 2.38% to close at $56.93 per barrel. Venezuela's contribution to global oil output is less than 1%, which limits the impact of its political turmoil on the broader energy market.

Adrian Helfert, chief investment officer for multi-asset strategies at Westwood, noted that Gulf Coast refiners and energy service firms could benefit significantly if Venezuela's political climate stabilizes and infrastructure rebuilding begins.

Shares of major energy companies such as Chevron and Exxon Mobil surged on these expectations, though they later surrendered some of those gains on January 6.

Economic Outlook Remains Positive

Economists remain optimistic about the U.S. economic outlook for the coming year.

Steven Ricchiuto, chief U.S. economist at Mizuho Securities USA, stated, "We anticipate that the economy will get a boost early in 2026 from a wave of government refunds tied to individual tax cuts in the OBBB (One Big Beautiful Bill)." He also expects the effects of last year’s Federal Reserve rate reductions to become more apparent.

Reporting by Reuters contributed to this article.