Markets Update Jan. 7, 2026: S&P 500 & Dow Slip After Record Highs; Oil Prices Retreat

Major U.S. stock indexes closed mostly lower Wednesday, with the Dow Jones Industrial Average and S&P 500 reversing after setting fresh all-time highs.

The Dow fell 0.9% and the S&P 500 slipped 0.3%, while the Nasdaq managed a 0.2% gain. The rally earlier this week was fueled by the U.S. military’s capture of Venezuelan president Nicolás Maduro, which pushed the Dow above 49,000 for the first time.

President Trump announced on Truth Social that Venezuela’s interim authorities would deliver 30 50 million barrels of sanctioned oil to the U.S. CNBC later reported Venezuelan oil sales would continue indefinitely with reduced sanctions. West Texas Intermediate crude dropped 1.7% to $56.15 a barrel, while Valero Energy stock hit an all-time high, rising 3%.

The 10-year Treasury yield eased to 4.14% from 4.17% as investors weighed economic data. ADP reported weaker-than-expected private-sector job growth in December, and BLS data showed unemployed workers outnumbered job openings in November for the first time in four years.

Gold futures slipped 0.6% to $4,470 after nearing their Dec. 26 record of $4,584. Bitcoin traded around $90,900, down from a high of $93,800, while the U.S. dollar index edged up 0.1% to 98.69.

Western Digital and Seagate, which surged Tuesday, dropped 9% and 7% respectively, while Sandisk rose 1.2%. Nvidia gained 1% and AMD fell 2% after CES 2026 AI chip announcements, while Intel jumped 6.4% to lead the S&P 500 and Nasdaq.

Shares of bitcoin-treasury firm Strategy rose 2.4% after MSCI confirmed digital asset treasury companies would remain in its indexes.

Nvidia’s ambitions in China remain complicated. CEO Jensen Huang announced plans to sell the H200 AI chip in China after securing President Donald Trump’s approval, which requires giving the U.S. government a 25% cut of sales. CFO Colette Kress added that Washington is “working feverishly” on the details, with shipments expected soon.

Beijing, however, has ordered companies to halt H200 purchases and may mandate domestic chip adoption, according to reports. Nvidia declined to comment, but the move threatens to derail what Huang has described as a $50 billion annual opportunity. The company’s forecasts, which already project revenue above $210 billion, did not factor in China sales of the H200 or the H20 chip approved last August.

The H20, tailored for China’s market, has also faced resistance from Beijing and bipartisan opposition in the U.S. Congress. Analysts at Morgan Stanley, Jefferies, and Bernstein noted potential upside from China sales but excluded them from base-case projections due to political uncertainty.

Nvidia shares rose 1% Wednesday, leaving them flat for 2026 after a nearly 40% surge last year.

Investors may want to revisit Chipotle Mexican Grill (CMG) as the burrito chain looks to rebound. After a nearly 40% drop in 2025, shares are trading at a discount, and analysts highlight several promising moves that could reignite growth.

Chipotle’s sales softened as younger and lower-income consumers cut back on dining out, leaving some restaurants empty. Yet Oppenheimer and Deutsche Bank both list Chipotle as a top restaurant investment pick, citing limited-time offers and new sauces as potential traffic drivers.

The company’s new high-protein menu, featuring smaller and lower-cost options, is designed to appeal to Americans focused on weight loss including those using GLP-1 medications. Analysts believe this strategy could broaden Chipotle’s reach and revive demand.

Oppenheimer noted Chipotle may be on the verge of a “spicy revival story,” with aggressive sales drivers set against lower expectations in 2026.

Big tech may have cooled, but the first trading sessions of 2026 show investors chasing momentum in storage.

Data storage stocks exploded earlier this week after Nvidia CEO Jensen Huang, speaking at CES in Las Vegas, spotlighted the artificial intelligence industry’s massive need for memory and storage hardware.

Shares of Sandisk jumped more than 27% Tuesday, extending a 500% surge in 2025 with another 43% gain in early 2026. Western Digital and Seagate also advanced 17% and 14% before pulling back Wednesday.

Memory and storage names stand out as winners while the broader AI trade struggles. Concerns about an AI bubble linger, with most of the Magnificent Seven stocks except Amazon down year-to-date. Other former AI rally leaders like Constellation Energy, Oracle, and Applovin have also slipped since January began.

Pharma giant Eli Lilly is reportedly in advanced talks to acquire Ventyx Biosciences, sparking a surge in the smaller biotech’s shares Wednesday.

Ventyx Biosciences (VTYX) stock jumped more than 30% in afternoon trading after The Wall Street Journal reported Lilly (LLY) maker of blockbuster weight-loss drugs Mounjaro and Zepbound was negotiating a cash deal valued at $14 per share for the San Diego-based company.

The Journal, citing sources familiar with the matter, said the deal would give Lilly access to Ventyx’s pipeline of oral therapies targeting inflammation-driven cardiovascular and neurodegenerative diseases.

Ventyx shares, which closed at $10.05 Tuesday, soared to $13.80 late Wednesday, while Lilly stock gained nearly 4%.

Defense companies faced sharp declines Wednesday after President Donald Trump targeted the industry.

Shares of Northrop Grumman dropped 2.3%, General Dynamics fell 1.7%, and Lockheed Martin slipped 1% following Trump’s post on Truth Social criticizing defense contractors.

Trump argued that defense firms are prioritizing dividends and stock buybacks over investments in plants and equipment, calling the practice unacceptable. He declared that dividends and buybacks “will not be permitted” until companies address these issues.

Boeing secured a major endorsement from Alaska Airlines, which announced its largest order ever 110 planes over the coming years. The deal includes 105 Boeing 737-10 jets, still awaiting federal certification, and five 787 Dreamliner wide-body aircraft for international routes.

Alaska Airlines shares are down about 25% over the past year, while Boeing stock has climbed more than 30%. The order is designed to replace older aircraft and expand Alaska’s fleet, with the airline noting it “secures critical delivery slots and extends the aircraft delivery stream through 2035.”

The agreement also includes options for an additional 35 737-10 planes. By 2035, Alaska Airlines expects its fleet to grow to 550 aircraft, up from 413 today.

Strategy shareholders finally caught a break this week.

Index provider MSCI said late Tuesday it would not remove publicly traded companies with large cryptocurrency holdings from its indexes for now. Strategy (MSTR), known for its massive bitcoin reserves, saw its stock climb about 4% before easing off earlier highs.

The announcement eased pressure on Strategy shares, at least temporarily. MSCI had previously floated removing digital asset treasury companies (DATCOs) from its indexes, arguing they resembled investment funds that don’t qualify for inclusion. That proposal rattled investors, with analysts warning it could trigger similar moves by other index providers and potentially cost Strategy billions in outflows.

Amie Wilkinson says she would think twice about student loans if given another chance.

Wilkinson, 45, graduated from a California college in 2001 with dual degrees in English and Political Science. She left school with about $60,000 in debt, but that balance has since ballooned to nearly $150,000.

After 15 years on standard repayment and periods of forbearance, Wilkinson switched to the Income-Based Repayment plan, which lowered her monthly payments based on income and family size. While the plan currently sets her payments at zero dollars, the interest has continued to compound, driving her debt higher.

The unsettled global landscape is fueling a surge in prediction markets, where millions are being wagered on geopolitical outcomes.

Event contracts tied to conflicts and leadership changes in regions like the Middle East and China are trending on platforms such as Polymarket and Kalshi. Trading volumes have spiked on questions including “Israel strikes Iran by January 31, 2026?” and “World leaders out before 2027?” An Investopedia review found more than $110 million in wagers across 20 geopolitically linked contracts.

Demonstrations in Iran and unrest in Venezuela are among the flashpoints drawing bettors. Polymarket data shows over $10.5 million in trading volume on whether the U.S. will invade Venezuela, while nearly $1.4 million has been wagered on the possibility of Israel striking Iran by month’s end.

Kalshi contracts are also active, with more than $2 million in trading tied to who will become Venezuela’s next leader, and around $1 million bet on which world leaders may be ousted before year-end.

For the first time since 2021, unemployed workers significantly outnumbered available jobs in November, signaling a deteriorating labor market. The Bureau of Labor Statistics reported 7.1 million openings, down from 7.4 million in October and well below forecasts of 7.6 million. The ratio of openings to unemployed slipped to 0.9, marking the weakest level in four years.

The Job Openings and Labor Turnover Survey reinforced last month’s BLS data showing unemployment at a four-year high. Economists point to tariffs, President Donald Trump’s immigration crackdown, and AI adoption as factors weighing on hiring. Still, employers have largely avoided mass layoffs, with analysts noting the market is sluggish but not collapsing.

Federal Reserve officials are expected to closely examine the report alongside Friday’s upcoming jobs data. The Fed has already cut interest rates at three consecutive meetings to prevent the slowdown from escalating into a sharp rise in unemployment, underscoring concerns about the labor market’s fragility heading into 2026.

Forecasters expect Friday’s Bureau of Labor Statistics report to show the U.S. economy added 73,000 jobs in December, with unemployment edging down to 4.5% from 4.6%. That would mark a slight improvement from November’s 64,000 jobs, when unemployment hit its highest level since 2021.

Hiring has slowed sharply since President Donald Trump’s “Liberation Day” tariffs in April 2025, with the economy averaging just 17,000 jobs per month between May and November compared to 147,000 in the prior year. Immigration restrictions have further tightened the labor supply, leaving job seekers struggling to find work. The Federal Reserve has responded with multiple interest rate cuts to cushion the slowdown.

Some economists warn the BLS may be overstating job growth, suggesting the economy has actually been losing about 20,000 jobs per month since April. Fed Chair Jerome Powell echoed those concerns, underscoring the fragile state of the labor market heading into 2026.

Albertsons shares fell 6% Wednesday after the supermarket chain reported weaker-than-expected fiscal Q3 net sales and lowered its guidance for identical sales growth. Net sales came in at $19.12 billion, slightly missing analyst expectations of $19.16 billion, while identical sales growth of 2.4% was pressured by delayed SNAP funding tied to the government shutdown.

The company now projects full-year identical sales growth of 2.2% to 2.5%, down from its prior range of 2.2% to 2.75%. Albertsons cited the Inflation Reduction Act’s Medicare Drug Price Negotiation Program, which took effect January 1, 2026, as a headwind that will reduce pharmacy sales by up to 70 basis points in Q4.

With shares down nearly 20% over the past year, investors remain cautious about Albertsons’ ability to navigate policy-driven challenges and consumer spending pressures, even as the company works to stabilize its performance heading into 2026.

First-time homebuyers in 2026 still face challenges from high prices and elevated mortgage rates, but some metro areas stand out as more favorable. A new Realtor.com report highlights Rochester, N.Y., Harrisburg, Pa., and Granite City, Ill. as markets offering affordability, strong inventory, and solid local economies.

These regions provide a mix of lower costs, accessible amenities, and economic stability that make homeownership more attainable compared to national trends. Danielle Hale, Realtor.com’s chief economist, emphasized that location plays a critical role in shaping both the timing and tradeoffs of buying a first home.

With affordability pressures persisting nationwide, these highlighted markets represent rare opportunities for younger buyers to enter the housing market in 2026, balancing financial feasibility with lifestyle needs.

The AI boom is shifting from software to the physical world, according to industry leaders. AMD CEO Lisa Su told CNBC that “physical AI” technology powering humanoid robots and self-driving cars could be the next major frontier, and said it is central to AMD’s long-term strategy.

Nvidia CEO Jensen Huang echoed that vision, telling investors a “ChatGPT moment” for robotics may have arrived. Nvidia recently unveiled new AI models designed to accelerate applications in autonomous machines, with robotaxis among the first to benefit. Huang noted Mercedes-Benz will integrate Nvidia’s driver-assistance software into a new production car this year.

Analysts at Wedbush and Bernstein praised Huang’s outlook, with Bernstein predicting physical AI is “set for an inflection with Autonomous Driving leading the charge.” Both chipmakers see robotics and autonomous systems as the next growth engine for the AI industry.

Smart glasses are gaining momentum as AI integration, lightweight electronics, and fashion partnerships make them more practical and appealing. Industry experts believe Americans may soon embrace them as part of their everyday tech lineup, with companies betting big on the category’s growth.

Snap and Apple are preparing new releases, while Meta has teamed up with Ray-Ban’s parent EssilorLuxottica, and Google has partnered with Samsung and Warby Parker. Meta’s Ray-Ban Display has already fueled a 250% surge in the smart glasses market in 2025, though the company is delaying international rollout to meet overwhelming U.S. demand.

With major tech players competing to define the next wave of personal electronics, AI-powered smart glasses are positioned as a “mind-blowing” innovation that could reshape how consumers interact with both fashion and technology in 2026.

Apogee Enterprises shares dropped 11% in premarket trading Wednesday after the Minneapolis-based building products provider lowered its fiscal 2026 outlook for the second straight quarter. The company now expects net sales of $1.39 billion and adjusted EPS of $3.40 to $3.50, down from prior guidance of up to $1.42 billion in sales and $3.90 in earnings.

The weaker forecast accompanied fiscal Q3 results and news that CFO Matthew Osberg will resign on Jan. 16 to pursue another opportunity. Apogee appointed Mark Augdahl as interim CFO, marking another leadership shake-up after CEO Ty Silberhorn was ousted in October and replaced by Independent Chair Donald Nolan.

With shares down more than a third over the past year, investors remain cautious about Apogee’s ability to stabilize performance amid lowered guidance and ongoing executive turnover.

The Dow Jones and S&P 500 both reversed after hitting fresh all-time highs, closing lower on Wednesday, while the Nasdaq managed a slight gain. The drop came as investors digested news of Venezuelan oil shipments to the U.S., weaker labor market data, and falling Treasury yields. Commodities also slipped, with crude oil and gold both down, while Bitcoin retreated from earlier highs. Tech and memory stocks showed mixed performance Intel surged, Sandisk rebounded, but Western Digital and Seagate pulled back.