GLOBAL MARKETS-Wall Street mixed on the first trading day of 2026; precious metals resume rally

By Stephen Culp

NEW YORK, Jan 2 (Reuters) - U.S. stocks faded after the opening bell on Friday, as the Nasdaq clung to gains due to semiconductor strength and precious metals extended their rally.

All three major U.S. indexes pared earlier gains, on the verge of extending their four-session losing streaks as investors ended the week and began the year.

All three indexes were on track to post losses for the holiday-shortened week.

"When you turn the page for a new year and you're a money manager, you're waiting to see, you know, what's going to be, for lack of a better word, the vibe for the coming year," said Thomas Martin, senior portfolio manager at Globalt in Atlanta. "The narrative itself doesn't change at all. So far this morning, the winners of 2025 ... are doing fairly well."

Gold's 2025 rise was its biggest in 46 years, while silver and platinum made their largest gains on record, driven by a cocktail of factors including the Fed's rate cuts, geopolitical flashpoints, robust central bank buying and ETF inflows.

Stocks made strong gains in 2025 as markets weathered a year of tariff wars, the longest government shutdown in U.S. history, geopolitical strife as well as threats to central bank independence.

THE FED'S YEAR AHEAD

Markets will focus on monetary policy in the year ahead, as Jerome Powell approaches the end of his tenure as Federal Reserve chair and economic data releases return to their more regular and current release schedule in the aftermath of the federal government shutdown. A spate of delayed indicators due in the coming days could be key in determining the path forward for the central bank.

"One of the most important things will be maintaining Fed independence," Martin added. "Even though the newest members were appointed by (U.S. President Donald) Trump and they're more dovish, they want to at least give the appearance that the Fed is independent because once you lose that, you're kind of like in trouble."

The extent to which markets begin to reap the benefits of massive investments in nascent artificial-intelligence technology will also likely receive close scrutiny in the year ahead.

The new year also promises to deliver some geopolitically driven volatility, with U.S. congressional midterm elections this autumn and ongoing negotiations toward ending Russia's war in Ukraine, along with ongoing tensions in the Middle East.

The Dow Jones Industrial Average .DJI rose 49.71 points, or 0.10%, to 48,113.00, the S&P 500 .SPX fell 2.83 points, or 0.04%, to 6,842.67 and the Nasdaq Composite .IXIC fell 30.11 points, or 0.13%, to 23,211.89.

European shares began the new year by building on the previous year's solid gains by setting record highs, with a boost from defense stocks. Investors eyed the STOXX 600 as it approached the 6,000 milestone.

London's blue-chip FTSE 100 .FTSE index hit the symbolic 10,000-point mark for the first time.

MSCI's gauge of stocks across the globe .MIWD00000PUS rose 3.23 points, or 0.32%, to 1,017.97.

The pan-European STOXX 600 .STOXX index rose 0.7%, while Europe's broad FTSEurofirst 300 index .FTEU3 rose 17.32 points, or 0.73%.

Emerging-market stocks .MSCIEF rose 24.26 points, or 1.73%, to 1,429.58. MSCI's broadest index of Asia-Pacific shares outside of Japan .MIAPJ0000PUS closed 1.72% higher at 735.02, while Japan's Nikkei .N225 fell 187.44 points, or 0.37%, to 50,339.48.

GOLD, SILVER CONTINUE TO SPARKLE

Gold and silver kicked off the new year on a strong note, bouncing back from end-of-year declines as ongoing geopolitical strife stoked appetite for the precious metals.

Spot gold XAU= rose 0.53% to $4,336.77 an ounce, while spot silver XAG= rose 1.3% to $72.20 per ounce.

The dollar was essentially flat in the aftermath of the greenback's largest yearly drop in eight years.

The dollar index =USD, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.05% to 98.20, with the euro EUR= up 0.05% at $1.1751.

Against the Japanese yen JPY=, the dollar weakened 0.06% to 156.57.

In cryptocurrencies, bitcoin BTC= gained 1.16% to $89,319.30. Ethereum ETH= rose 3.12% to $3,079.77.

U.S. Treasury yields appeared set to notch their third consecutive daily gains.

The yield on benchmark U.S. 10-year notes US10YT=RR rose 2.4 basis points to 4.177%, from 4.153% late on Wednesday.

The 30-year bond US30YT=RR yield rose 3.1 basis points to 4.861% from 4.83% late on Wednesday.

The 2-year note US2YT=RR yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 0.4 basis point to 3.473%, from 3.469% late on Wednesday.

Oil prices slid after logging their biggest annual loss since 2020 as investors weighed oversupply worries against geopolitical risks.

U.S. crude CLc1 fell 1.06% to $56.81 a barrel and Brent LCOc1 fell to $60.16 per barrel, down 1.13% on the day.