Chip Gains Offset Tech Weakness Amid Tariff Delays and Leadership Uncertainty

U.S. stock markets kicked off 2026 on a cautious note, with the Dow Jones Industrial Average holding steady amid mixed sector performance. Semiconductor strength countered broader tech softness, while tariff delays boosted select consumer names and ongoing Fed leadership questions kept investors watchful.

(Sources: TradingView)

Chip Stocks Stabilize Market After 2025 Tech Boom

Semiconductors like Nvidia (NVDA) and Micron (MU) posted solid gains, extending momentum from 2025’s AI-driven surge. Software firms such as Salesforce (CRM) and CrowdStrike (CRWD) lagged, while Tesla (TSLA) weighed on sentiment after reporting Q4 deliveries well below expectations.

Despite the muted open, 2025 delivered strong benchmarks: S&P 500 +>16%, Nasdaq +>20%, Dow ~13%—all closing with multiple record highs.

Tariff Pause Lifts Furniture and Home Goods

Furniture retailers surged after President Donald Trump delayed planned tariff hikes on upholstered furniture, kitchen cabinets, and sinks for one year.

Wayfair (W), RH, and Williams-Sonoma (WSM) led gains, as investors reassessed cost pressures in a sector split between value and premium brands in 2025.

Economic data showed U.S. manufacturing activity cooled slightly in December per S&P Global PMI, though employment accelerated to the fastest pace since August and price pressures eased—signaling stable but mixed growth.

Fed Leadership and Corporate Transitions in Focus

Federal Reserve leadership remains a key 2026 wildcard. Chair Jerome Powell has declined to clarify post-May plans, fueling debate over future policy balance.

A full departure would give President Trump immediate influence over a majority of FOMC members, potentially reshaping rate paths.

Corporate news added to transition themes: Warren Buffett officially handed Berkshire Hathaway (BRK) CEO reins to Greg Abel, ending his six-decade tenure. Buffett expressed strong confidence in Abel’s capital allocation, though shares have lagged broader markets amid post-Buffett era questions.

Berkshire’s vast cash reserves and diversified holdings underscore long-term resilience as the conglomerate enters a new chapter.

2026 Outlook: Rotation and Policy Catalysts

Wall Street’s latest strategist surveys project S&P 500 targets near 7,629—implying double-digit upside. Many expect leadership broadening beyond mega-cap tech into regional banks and non-tech sectors.

Tariff and fiscal policy developments will shape sentiment, alongside Fed decisions and potential government funding resolutions.

Markets appear positioned for rotation plays while monitoring leadership signals—from D.C. to corporate boardrooms.

Key FAQs on the Dow Jones Industrial Average

What is the Dow Jones Industrial Average? The DJIA is one of the oldest stock indexes, tracking 30 large U.S. companies. It’s price-weighted (not market-cap weighted) and divided by a divisor (~0.152 currently) to account for splits and adjustments.

What drives the Dow’s performance? Component earnings, macro data, Fed policy (rates affect borrowing costs), and sentiment toward blue-chip industrials all play roles.

What is Dow Theory? Charles Dow’s method for identifying trends by comparing the DJIA and Transportation Average, focusing on confirmed directions with volume support.

How can I trade or invest in the Dow? Via ETFs like SPDR Dow Jones Industrial Average ETF (DIA), futures, options, or mutual funds offering diversified exposure.