Semiconductor Surge Propels Nasdaq 100 to Strong Weekly Finish

The Nasdaq 100 closed the first full trading week of 2026 on a high note, rallying 259 points to finish at 25,766. The advance was fueled by a surprisingly resilient labor market report that alleviated recession fears without entirely extinguishing hopes for future interest rate cuts. This environment provided the perfect backdrop for a broad-based rally in semiconductor stocks.

Semiconductor equities dominated the session's gains. Intel surged 10.8%, emerging as the clear leader for the day. The catalyst was a meeting between CEO Lip-Bu Tan and President Trump, which centered on potential government support for domestic chip manufacturing. Other notable gainers in the sector included Micron Technology, which advanced 5.5%, AppLovin, up 5.1%, and Broadcom, which added 3.8%.

This strength stood in contrast to the software segment, where shares faced pressure. Adobe declined 1.5%, DexCom lost 1.5%, and Netflix dipped 1.2%. The trading action suggested a rotation by investors out of defensive growth stocks and into more cyclical chip names.

Labor Data Delivers a Balanced Message

Friday's U.S. jobs report presented a mixed picture that ultimately reassured the market. While the economy added only 50,000 new positions—falling short of the 70,000 forecast—the unemployment rate unexpectedly dropped to 4.4%. This indicated underlying labor market stability greater than many had anticipated.

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For investors, this combination struck an ideal balance: it diminished immediate recession concerns while also avoiding signs of an overheated economy that could force the Federal Reserve to consider rate hikes. However, the probability of a January interest rate cut now stands at just five percent.

Technical Backdrop Stays Positive

From a chart perspective, the outlook remains constructive. After a brief pullback earlier in the week, the index successfully defended its 50-day moving average, situated at 25,503 points. The closing price settled just above the 5-day average of 25,764. The immediate technical hurdle is the year-to-date high at 25,835. A decisive break above that level would bring the psychologically significant 26,000 mark into view.

The Relative Strength Index (RSI) reading of 62.6 suggests further room for upward movement before entering overbought territory. On the downside, initial support is found at 25,640, with a stronger floor around 25,350.

Week Ahead: Inflation and Earnings in Focus

The upcoming week brings key U.S. inflation data and marks the beginning of the fourth-quarter earnings season. Major banks are scheduled to report their results starting Tuesday. As long as the yield on the benchmark 10-year U.S. Treasury note remains stable around 4.2%, the environment should continue to support technology stocks. However, a pending court ruling on trade tariff issues could introduce short-term volatility.