Tech Stocks Ease Higher as “Magnificent Seven” Lose Momentum

A renewed wave of enthusiasm around artificial intelligence gave global markets a strong opening to 2026, setting an upbeat tone for risk assets. Stocks climbed broadly, precious metals posted solid gains, and long-term bond yields moved higher as investors leaned into a more optimistic growth narrative.

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Futures tied to the Nasdaq 100 jumped 0.7%, driven largely by developments out of Asia that pushed a regional technology benchmark to a record high. In Hong Kong, chipmaker Shanghai Biren Technology Co. Ltd. surged in its trading debut, highlighting continued appetite for AI-linked semiconductor plays.

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Shares of Baidu Inc. also advanced after reports that its artificial intelligence chip division had confidentially filed for an initial public offering. Adding to the positive momentum, AI startup DeepSeek released a research paper detailing a more efficient method for developing advanced AI models, reinforcing confidence in ongoing innovation across the sector.

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Asian equity markets recorded their strongest start to a new year since 2012, reflecting broad-based optimism across the region. European stocks joined the rally, with futures on the Stoxx 600 moving higher, while contracts tied to the S&P 500 pointed to gains when U.S. markets reopen. In fixed income, the yield on 30-year U.S. Treasuries climbed to its highest level since early September, as improving expectations for American economic growth reduced demand for traditional safe-haven assets.

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Commodities were also swept up in the risk-on mood. Silver prices surged roughly 4%, outperforming most major assets, while gold extended its advance as investors balanced growth optimism with lingering uncertainty around inflation and geopolitics. The combination of rising yields and stronger metals prices suggested markets were recalibrating expectations rather than making a wholesale shift away from defensive positions.

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Technology stocks and artificial intelligence were among the most influential market themes throughout 2025, helping propel global equities to a third consecutive year of double-digit gains. Investors continue to view AI as a transformative force capable of reshaping productivity, corporate earnings, and long-term economic growth. That narrative has supported elevated valuations across much of the tech sector and encouraged capital to flow into companies positioned to benefit from increased AI adoption.

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Still, risks remain as markets enter the new year. Uncertainty surrounding the future path of U.S. monetary policy continues to loom large, particularly as investors debate how quickly the Federal Reserve may pivot toward interest-rate cuts. At the same time, stretched valuations in parts of the technology space leave little room for disappointment, making stocks more sensitive to earnings surprises or shifts in macroeconomic data.

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“What we’re seeing now is essentially a continuation of the equity rally, with AI and technology once again leading the charge,” said Tim Waterer, chief market analyst at KCM Trade. “Investors are clearly still in a buying mindset, and many of the bullish trends that defined 2025 appear to be carrying over into 2026.”

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Despite the strong start, some strategists are urging caution against assuming smooth sailing in the early days of the year. Market research firm Bespoke Investment Group has warned that the first trading session of January has historically been an unreliable indicator of full-year performance.

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According to data cited by Bespoke, the median move for the S&P 500 on the first trading day of the year has been a decline of about 0.3% dating back to 1953, with positive returns occurring less than half the time. The firm also noted that U.S. stocks have finished lower on the opening trading day in each of the past three years, underscoring how early optimism can quickly fade.

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For investors, the takeaway is a familiar one. While enthusiasm around artificial intelligence and technological innovation continues to provide powerful tailwinds for equities, short-term market behavior can still be unpredictable. Strong openings don’t guarantee smooth returns, and long-term success may hinge on balancing exposure to growth themes like AI with an awareness of valuation risks and shifting monetary policy dynamics.

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As 2026 gets underway, markets appear eager to build on last year’s momentum. Whether that optimism proves durable will depend on how economic data, corporate earnings, and central bank decisions unfold in the months ahead.

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