Weekly Market Update

Weekly Market Update: January 3-9, 2026

The first full trading week of 2026 was marked by significant market fluctuations, driven by various factors including the US military strike and capture of President Maduro in Venezuela, the revival in optimism for AI demand, and a flurry of economic data releases.

Key Highlights:
• The Dow Jones Industrial Average (^DJI) rose about 1.2% to close above 49,000 for the first time, while the S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) added around 0.6%.
• Oil majors such as Chevron (CVX) and Halliburton (HAL) saw significant gains due to prospects of rebuilding Venezuela's energy infrastructure.
• Nvidia (NVDA) shares jumped after Goldman Sachs raised its price target, while Taiwan's Foxconn reported record fourth-quarter revenue driven by strong demand for AI products.

Market Reaction:

The market reaction to the US military action in Venezuela was mixed, with some strategists downplaying the long-term economic fallout. However, others warned that the larger risk may come from China, which is a significant buyer of Venezuelan oil.

Economic Data Releases:
• The December jobs report showed payroll growth of about 50,000, falling short of economists' expectations.
• ADP's private sector employment update and JOLTS report indicated anemic hiring rates in November.
• Labor market data releases set the stage for Friday's crucial jobs report, which has taken on critical importance as investors view it as a key test of whether the economy is cooling enough to justify Federal Reserve policy changes.

Federal Reserve Policy:

The December jobs report and subsequent economic data releases have implications for Federal Reserve policy decisions. With payroll growth falling short of expectations, some analysts believe that the Fed may stand pat on interest rates in less than three weeks.

Geopolitical Risks:

Geopolitical risks have been brought back into the equation following the Trump administration's seizure of Venezuelan President Nicolás Maduro. The Supreme Court's potential ruling on the legality of tariffs imposed under Trump adds to the uncertainty surrounding global economic strategy.