Markets began 2026 on a positive trajectory with broad-based gains, led by a surge in the Dow Jones Industrial Average of over 300 points. The index's performance underscored investor willingness to engage in risk assets despite prevailing uncertainty portrayed by sentiment gauges. The CNN Business Fear & Greed Index, a composite indicator synthesizing market psychology, remained largely unchanged, continuing to register within the “Neutral” zone.
Technology and semiconductor sectors featured prominently in the day’s trading, with shares of Nvidia (NASDAQ:NVDA) and Micron Technology (NASDAQ:MU) posting advances. These companies' outperformance contributed to the Dow’s rise, reflecting sustained investor interest in chipmakers amid evolving market dynamics.
Looking back over the preceding year, U.S. equities exhibited notable strength. The S&P 500 marked a 16.39% gain for 2025, achieving its third consecutive year of double-digit returns. Meanwhile, the Nasdaq Composite outpaced the broader market with a 20.36% increase, bolstered by gains in technology-driven firms. The Dow also delivered substantial growth, closing 2025 up 12.97%, highlighting a broadly supportive growth environment.
In contrast to this optimistic backdrop, Outlook Therapeutics, Inc. (NASDAQ:OTLK) suffered a steep decline of over 58% during Friday’s session. The drop followed the Food and Drug Administration (FDA) issuance of a complete response letter for its ONS-5010/LYTENAVA biologics license application resubmission. The FDA’s letter indicated that the current form of the application, targeting treatment for wet age-related macular degeneration, did not meet approval criteria, signalling regulatory hurdles ahead for the company.
From an economic standpoint, recent data also added nuance to the market environment. The S&P Global manufacturing Purchasing Managers’ Index (PMI) eased to a reading of 51.8 in December, descending from 52.2 the prior month. Although still reflecting expansion in manufacturing activity, the slight dip may prompt investors to monitor potential shifts in industrial momentum.
Sector performance during the trading session was mixed. Energy, industrials, and materials sectors attained the most substantial gains, indicating selective strength in those segments. Conversely, consumer discretionary and communication services stocks closed with losses, demonstrating uneven investor confidence across market groups.
At the close, the Dow Jones Industrial Average increased by approximately 319 points, settling at 48,382.39. The S&P 500 index rose by 0.19% to end at 6,858.47, whereas the Nasdaq Composite marginally declined by 0.03% to 23,235.63, reflecting a slight divergence among key benchmarks.
The CNN Business Fear & Greed Index recorded a reading of 44.6, signifying continued neutrality in market mood compared to the previous day’s 44.8. This indicator, which ranges from 0 (extreme fear) to 100 (extreme greed), utilizes seven equally weighted metrics to capture shifts in investor appetite and caution. Its maintained position near the midpoint suggests that neither excessive exuberance nor pervasive risk aversion dominated sentiment on the opening day.
Understanding the CNN Business Fear & Greed Index
The index serves as a barometer of market sentiment, driven by the understanding that fear can exert downward pressure on stock prices, while greed tends to elevate valuations. By synthesizing multiple indicators—including price momentum, stock price strength, and volatility—the index provides a composite snapshot of collective investor psychology.
- Market Performance: The Dow Jones advanced by over 300 points, supported by gains in semiconductor stocks, while the S&P 500 showed modest growth and the Nasdaq slightly declined.
- Sector Variability: Energy, industrials, and materials ended the session positively, contrasting with losses in consumer discretionary and communication services sectors.
- Regulatory Impact: Outlook Therapeutics fell sharply following an adverse FDA response on its biologics license application for treating wet age-related macular degeneration.
- Sentiment Indicator: The Fear & Greed Index remained firmly within the neutral zone, reflecting balanced market psychology without pronounced fear or greed forces.
- Regulatory Uncertainty: The FDA’s non-approval stance on OTLK's biologics license application introduces unresolved risk for the company and potentially impacts investor confidence.
- Economic Data Signals: The decline in the manufacturing PMI suggests potential softening in industrial momentum that investors will closely observe moving forward.
- Sector Disparities: Divergent sector performances highlight uneven risk appetite, with some areas of the market showing clear strength while others lag.
- Sentiment Stability: The persistent neutrality in the Fear & Greed Index indicates market participants may be cautious, leading to restrained volatility and measured investment behavior.