The new year is off to a wild start, with the Dow Jones Industrial Average (DJI) and S&P 500 (SPX) notching records earlier this week following the U.S. capture of Venezuelan President Nicolás Maduro, which boosted the defense and energy sectors. The blue-chip index backpedaled from its first ever close above the psychologically significant 49,000 level, though, as President Donald Trump moved to stop defense companies from issuing dividends and stock buybacks and oversupply fears dinged oil prices.
After notching a third-straight gain, the Nasdaq Composite (IXIC) also pivoted lower, as investors rotated out of tech on the heels of a strong start to 2026 for AI stocks. Traders also had plenty of economic data to unpack, with a weak nonfarm payrolls report for December inspiring rate cut hopes. The Supreme Court also held off on a decision regarding President Trump's tariffs, with all three major indexes on track for weekly gains as of Friday afternoon.
Energy & Defense in the Spotlight
The regime change in Venezuela triggered big moves in the defense and energy sectors. Chevron (CVX) and Exxon Mobil (XOM) shares surged after President Trump noted U.S. oil companies will be “very strongly involved” in the country's oil industry. Separately, nuclear power giants Vistra (VST) and Oklo (OKLO) announced a 20-year deal with Meta Platforms (META), with the former also unveiling a $4.7 billion acquisition.
On the defense side, Lockheed Martin (LMT) and Huntington Ingalls Industries (HII) enjoyed tailwinds from heightened geopolitical tensions, and Northrop Grumman (NOC) and General Dynamics (GD) shares rallied after President Trump called for a higher military budget.
Tech Takes Over Amid CES Event
Investors watched the the Consumer Electronics Show (CES) in Las Vegas this week, where Intel (INTC) launched its launching its latest AI chip for laptops, creating trouble for rival Advanced Micro Devices (AMD). Mobileye Global (MBLY) revealed it acquired humanoid robot startup Mentee in deal worth $900 million, and Jefferies downgraded Adobe (ADBE), citing AI competition. Conversely, cloud giant CoreWeave (CRWV) secured a rare upgrade from D.A. Davidson, and options bulls continued to pile on Palantir Technologies (PLTR) over the last two weeks.
First Earnings Season of 2026 Starts Next Week
Inflation data and a host of other economic indicators are due out next week, with the first earnings season of 2025 also set to begin. Big banks are hitting the confessional, with reports set to come from Bank of America (BAC), Citigroup (C), Goldman Sachs (GS), JPMorgan Chase (JPM), Morgan Stanley (MS), PNC (PNC), and Wells Fargo (WFC), as well as travel giant Delta Air Lines (DAL).
In the meantime, find out how unwinding optimism could impact the SPX per Schaeffer's Senior V.P. of Research Todd Salamone, and why its double-digit annual win streak could be a warning sign to some, per Senior Quantitative Analyst Rocky White.
