US stocks inch higher as chips bump offsets ‘expensive’ S&P 500

• S&P 500 rose 0.2%, led by energy and industrials; semiconductors surged 4%
• Micron and Sandisk led gains; Tesla fell 2.6% after weak Q4 deliveries
• CES tech conference and tariff news boosted market sentiment

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The S&P 500 Index closed slightly in the green on Friday, as gains for semiconductor stocks helped mute concern about stretched valuations. Optimism about next week’s massive CES conference and signs President Donald Trump was easing up on tariff policies also boosted sentiment during the first trading day of the year.

The benchmark index rose 0.2%, with eight of 11 sectors in the green, led by energy and industrials. Consumer discretionary, communications and consumer staples declined. The Nasdaq 100 Index slipped 0.2%.

The Philadelphia Semiconductor Index advanced 4%, the most since Nov. 24, following gains for Asian chipmakers and artificial intelligence-related names. Flash-memory stocks Micron Technology Inc. and Sandisk Corp. led S&P 500 gainers, with the former closing up 11% at a record, and the latter soaring as much as 16%. Software stocks, however, were among the biggest decliners, pressured by continuing concerns about disruption from AI. Palantir Technologies Inc. shed 5.6%, closing at the lowest since Dec. 1.

“No way to sugar coat it: the S&P 500 is expensive,” Bank of America strategist Savita Subramanian wrote in a note. She said 18 of 20 metrics showed the benchmark index was “statistically expensive,” and that it’s the priciest ever according to several measures, including market cap-to-GDP and price-to-book-value ratios. Even though “historical comparisons are problematic, as today‘s S&P is higher quality, more asset light, less levered, etc.,” she sees “risks to the index abound in 2026.”

Advanced Micro Devices Inc. jumped 4.3% ahead of next week’s CES tech conference in Las Vegas. AMD CEO Lisa Su is due to speak Monday night. Nvidia Corp. added 1.3% with CEO Jensen Huang set to make several appearances at the event. He’ll likely focus on data centers, physical AI and robotics, according to Wedbush Securities tech analyst Dan Ives.

Tesla Inc. fell 2.6%, dropping for a record-tying seventh straight session, after reporting fourth-quarter deliveries slid a disappointing 16% year-over-year. Analysts expected the company would report a roughly 11% drop. Earlier this week, Tesla had taken the unusual step of publishing its own average of estimates that was even more pessimistic, calling for a 15% decline.

Tesla Ends 2025 With Another Quarterly Drop | Sales declined 16% in the fourth quarter

Wayfair Inc. and RH jumped after Trump’s latest tariff moves, which included delaying hikes on items like upholstered furniture and reducing anti-dumping levies on some Italian pasta.

The S&P 500 had ended 2025 around 1% below its Dec. 24 record, capping the year with four days of declines. Monday’s session offers a last shot at a “Santa Claus rally.” Friday volume was about 11% below the 20-day average.

“When markets are highly concentrated and near all-time highs, the right question to ask is ‘what could go wrong?’” JPMorgan Chase & Co.’s Michael Cembalest wrote in his outlook for 2026. He focuses on four risks: US power generation; China’s ability to scale its “technology moat”; China’s approach to Taiwan and the “ultimate profits earned on $1.3 trillion in hyperscaler capital spending and R&D since 2022.”

Next week, watch for results from early banking reporter Jefferies Financial Group Inc. and Friday’s jobs report.