Chip Makers and Energy Producers Lead Stock Indexes Higher

The S&P 500 Index ($SPX) (SPY) today is up +0.72%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +1.32%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +1.04%.  March E-mini S&P futures (ESH26) are up +0.72%, and March E-mini Nasdaq futures (NQH26) are up +1.10%.

Stock indexes are climbing today, with the Dow Jones Industrial Average posting a new all-time high.  Optimism about AI spending is boosting chipmakers and data storage companies. Also, energy companies are rallying today after President Trump said a team of US officials will “run” Venezuela after capturing Venezuelan President Maduro and that the US requires “total access” to the country, including its oil reserves.  In addition, mining stocks are moving higher as escalating geopolitical risks in South America boost demand for precious metals as haven assets, with gold up more than 3% and silver up more than 7%. 

Strength in European stocks today is providing carryover support to US equity markets after the Euro Stoxx 50 rallied to a new record high.

Today’s US economic news was negative for stocks after the Dec ISM manufacturing index unexpectedly fell -0.3 to 47.9, weaker than expectations of an increase to 48.4 and the steepest pace of contraction in 14 months. 

Dovish comments on Saturday from Philadelphia Fed President Anna Paulson were supportive for equity prices after she said she sees “inflation moderating, the labor market stabilizing, and growth coming in around 2% this year.  If all that happens, then some modest further adjustments to the funds rate would likely be appropriate later in the year." 

However, today’s comments from Minneapolis Fed President Neel Kashkari were slightly hawkish for Fed policy when he said that US interest rates may be "close to neutral" for the economy.

The market’s focus this week will be on US economic news.  On Tuesday, the Dec S&P manufacturing PMI is expected to be unrevised at 52.9.  On Wednesday, the Dec ADP employment change is expected to increase by +48,000.  Also, the Dec ISM services index is expected to slip -0.3 to 52.3.  In addition, the Nov JOLTS job openings are expected to climb by +9,000 to 7.679 million.  Finally, on Wednesday, Oct factory orders are expected to decline by -1.1% m/m.  On Thursday, Q3 nonfarm productivity is expected to climb by +4.7%, and unit labor costs are expected to rise by +0.3%. Also, initial weekly unemployment claims are expected to increase by 12,000 to 211,000.  On Friday, Dec nonfarm payrolls are expected to increase by +59,000, and the Dec unemployment rate is expected to slip by -0.1 to 4.5%.  Also, Dec average hourly earnings are expected to be up by 0.3% m/m and 3.6% y/y.  In addition, Oct housing starts are expected to increase by 1.4% m/m to 1.325 million, and Oct building permits are expected to rise by 1.1% m/m to 1.350 million. Finally, the University of Michigan's Jan consumer sentiment index is expected to climb by 0.6 points to 53.5. 

The markets are discounting the odds at 16% for a -25 bp rate cut at the FOMC’s next meeting on January 27-28.

Overseas stock markets are moving higher today.  The Euro Stoxx 50 rose to a new all-time high and is up by +1.01%.  China’s Shanghai Composite rallied to a 1.5-month high and closed up by +1.38%.  Japan’s Nikkei Stock 225 climbed to a 2-month high and closed up sharply by +2.97%.

Interest Rates

March 10-year T-notes (ZNH6) today are up by +5 ticks.  The 10-year T-note yield is down -2.4 bp to 4.167%.  Mar T-notes are moving higher today on dovish comments from Philadelphia Fed President Anna Paulson, who said she sees the Fed cutting interest rates later this year if inflation moderates.  Also, heightened global geopolitical risks boosted safe-haven demand for T-notes after the US raided Venezuela and captured Venezuelan President Maduro.  T-notes extended their gains today after the Dec ISM manufacturing index unexpectedly contracted by the most in 14 months, a dovish factor for Fed policy.

Strength in stocks today is limiting the upside in T-note prices. Also, comments from Minneapolis Fed President Neel Kashkari undercut T-notes when he said that US interest rates may be "close to neutral" for the economy.

European government bond yields are moving lower today.  The 10-year German bund yield is down -2.2 bp to 2.878%.  The 10-year UK gilt yield is down -2.9 bp to 4.508%.

Swaps are discounting a 1% chance of a +25 bp rate hike by the ECB at its next policy meeting on February 5.

US Stock Movers

Chip makers and data storage companies are moving higher today, supporting gains in the overall market.  KLA Corp (KLAC), Applied Materials (AMAT), and Lam Research (LRCX) are up more than +6%, and ASML Holding NV (ASML), ARM Holdings Plc (ARM), ON Semiconductor (ON), and Microchip Technology (MCHP) are up more than +5%.  Also, NXP Semiconductors NV (NXPI) is up more than +3%, and Texas Instruments (TXN), Analog Devices (ADI), Marvell Technology (MRVL), Advanced Micro Devices (AMD), Intel (INTC), and Qualcomm (QCOM) are up more than +2%. 

Energy producers and energy service providers are rallying today after President Trump said a team of US officials will “run” Venezuela and that the US requires “total access” to the country, including its oil reserves.  Valero Energy (VLO) is up more than +11% to lead gainers in the S&P 500.  Also, Halliburton (HAL) and SLB (SLB) are up more than +10%, and Phillips 66 (PSX) is up more than +7%.  In addition, Marathon Petroleum (MPC) is up more than +6%, and  ConocoPhillips (COP) and Baker Hughes (BKR) are up more than +5%.  Finally, Chevron (CVX) is up more than +4% to lead gainers in the Dow Jones Industrials. 

Mining stocks are moving higher today, with the price of gold up more than +2%, copper up +4%, and silver up more than +8%.  Coeur Mining (CDE) is up more than +6%, and Barrick Mining (B) and Hecla Mining (HL) are up more than +4%.  Also, Newmont Mining (NEM) and Freeport McMoRan (FCX) are up more than +3%. 

Cryptocurrency-exposed stocks are climbing today, with Bitcoin (^BTCUSD) up more than +4% at a 4-week high. Coinbase Global (COIN) is up more than +7%, and Galaxy Digital Holdings (GLXY), Strategy (MSTR), and Mara Holdings (MARA) are up more than +6%.  In addition, Riot Platforms (RIOT) is up more than +3%. 

GH Research Plc (GHRS) is up more than +20% after it said the FDA lifted the clinical hold on its Investigational New Drug Application for its GH001 drug, advancing the company toward initiating its global Phase 3 trial for treatment-resistant depression. 

QXO Inc (QXO) is up more than +17% after saying that Apollo Global and other investors agreed to invest $1.2 billion in the company through a new series of convertible perpetual preferred stock.

Moody’s Corp (MCO) is up more than +5% after Stifel upgraded the stock to buy from hold with a price target of $574.

United Rentals (URI) is up more than +5% after UBS upgraded the stock to buy from neutral with a price target of $1,025.

Mobileye Global (MBLY) is up more than +4% after Barclays upgraded the stock to overweight from equal weight with a price target of $16. 

Versant Media Group (VSNT) is down more than -13% to lead losers in the S&P 500 and Nasdaq 100 after the company’s separation from Comcast Corp was announced.

Domino’s Pizza (DPZ) is down more than -3% after TD Cowen downgraded the stock to hold from buy, citing growth challenges for the company.

Fortive Corp (FTV) is down more than -2% after Mizuho Securities double-downgraded the stock to underperform from outperform with a price target of $51.

Pentair Plc (PNR) is down more than -2% after TD Cowen downgraded the stock to sell from hold with a price target of $90.

Earnings Reports(1/5/2026)

None.