US equities opened 2026 cautiously, with the S&P 500 and Nasdaq remaining flat as semiconductor gains balanced broader tech sector weakness. The Dow Jones stabilised after initial declines, aligned with its starting position for the year’s first trading day.<\/p>\n
Wall Street strategists maintain optimism for US equities in 2026, predicting a potential S&P 500 target of 7,629, suggesting notable year gains. Market leadership may expand beyond mega-cap technology, with more focus on regional banks and other non-tech sectors, while certain tech stocks with high valuations may underperform.<\/p>\n
Chipmakers like Nvidia and Micron saw gains, fuelled by artificial intelligence spending, while software names such as Salesforce declined. Tesla impacted sentiment with delivery reports below expectations. Despite this, 2025 concluded with the S&P 500 up over 16%, Nasdaq over 20%, and the Dow around 13%, achieving record highs.<\/p>\n
In non-tech sectors, furniture stocks benefited as President Trump delayed tariff increases on related goods for a year. Companies like Wayfair rallied after re-evaluating trade-tied cost pressures. This followed divergent sector performance in 2025, where value-oriented retailers excelled despite struggles among high-end brands.<\/p>\n
US manufacturing cooled in December per the S&P Global PMI, with new orders slowing, although job creation accelerated. The Federal Reserve’s leadership is uncertain, with Jerome Powell undecided about his role post-May, potentially influencing the FOMC’s future direction.<\/p>\n
In corporate news, Warren Buffett handed Berkshire Hathaway’s CEO role to Greg Abel, ending his six-decade reign. Abel is trusted for his leadership, though Berkshire’s shares have underperformed since the announcement amidst questions about the company’s future direction.<\/p>\n
With the market starting 2026 on a flat note after the big gains of 2025, we see a chance for range-bound strategies. Selling iron condors on the SPY could be a way to collect premium, betting that the market will digest last year\u2019s rally before making a big move. This approach benefits from the market staying within a predicted channel in the coming weeks.<\/p>\n
The split between strong chipmakers and weak software points to a rotation we expect to continue. We saw a similar pattern in late 2023, when the equal-weight S&P 500 ETF (RSP) gained over 12%, outpacing the cap-weighted index and signaling a broadening market. To play this, we are looking at pairs trades, such as buying calls on the regional banking ETF (KRE) while buying puts on a software ETF like IGV.<\/p>\n
Specific company news is creating clear trading lanes, as seen with Tesla’s delivery miss and the rally in home goods stocks. For Tesla, where implied volatility often spikes above 60% after such news, using bear put spreads can define risk while betting on more weakness. On the other hand, bull call spreads on names like Wayfair (W) could capture upside from the tariff delay while managing the higher option costs after the initial stock price jump.<\/p>\n
The biggest source of uncertainty is the Federal Reserve, with Chair Powell’s term ending in May. We remember the market correction in February 2018 when the last leadership transition occurred, highlighting how these changes can spark volatility. Buying VIX calls or futures with expirations around key Fed meeting dates could be a good hedge against a market surprise.<\/p>\n
Even a giant like Berkshire Hathaway is seeing some pressure following the formal CEO handover to Greg Abel. Given the stock has lagged since the announcement, generating income from the position seems wise. We are looking at selling covered calls against long Berkshire (BRK.B) positions to take advantage of potentially flat price action in the near term.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" US stocks began 2026 flat; chip gains offset tech weakness. Buffett exits; manufacturing slows; optimism remains.<\/p>\n","protected":false},"author":62,"featured_media":16984,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-38159","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/38159","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=38159"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/38159\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16984"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=38159"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=38159"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=38159"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}