Defense Stocks Surge, Commodities Rebound, and Investors Turn Cautious Ahead of Key U.S. Data

Index Update:  Financial services stocks also remained subdued following their previous session’s downturn. In contrast, defense stocks outperformed after President Trump announced plans to raise the U.S. military budget to USD 1.5 trillion by 2027, boosting shares of companies such as Lockheed Martin, RTX, and Northrop Grumman, alongside heightened geopolitical tensions involving Venezuela and Greenland.

Market Movers:  On Wednesday, the top gainers were SMX (Security Matters) Public Limited Company. (+76.14%), followed by Regencell Bioscience Holdings Limited (+60.10%). On the contrary, Cohen & Company Inc. (-32.97%), and Ascent Solar Technologies, Inc. (-25.33%) declined the most the same day.

Commodities Update:  Brent and WTI crude futures rebounded on Thursday after two days of losses, with Brent rising above USD 60 per barrel and WTI climbing above USD 56 per barrel, as markets evaluated new U.S. actions related to Venezuela. Washington announced plans to take long-term control of Venezuelan crude sales, including releasing stored oil and supervising future production, while also stepping up sanctions enforcement by seizing additional Venezuela-linked tankers; President Trump added that Venezuela could transfer 30–50 million barrels of crude to the U.S., increasing supply expectations. Meanwhile, EIA data showed a surprise 3.8 million-barrel draw in U.S. crude inventories, offset partly by higher stocks at Cushing and larger-than-expected builds in gasoline and distillates, while softer U.S. labor data boosted expectations of further Federal Reserve rate cuts, supporting the oil demand outlook. Gold and silver prices fell on Thursday as recent bullish momentum eased amid mixed U.S. economic signals and a firmer dollar. Gold slipped to around USD 4,440 per ounce, pressured by stronger services-sector data and ahead of key nonfarm payrolls figures, even as softer labor indicators kept expectations of two Federal Reserve rate cuts this year intact. Silver dropped below USD 77 per ounce, retreating from near-record levels as investors reassessed the policy outlook, with markets largely expecting rates to remain unchanged at the next Fed meeting. Geopolitical developments—including heightened U.S. involvement in Venezuela, discussions around Greenland, and rising China–Japan tensions—continued to underpin safe-haven interest, while longer-term support came from ongoing central bank gold buying and strong industrial and investment demand for silver.

Macro Updates:  U.S. employers announced 35,553 job cuts in December 2025, the lowest since July 2024 and sharply down from November, signaling some year-end stabilization despite a challenging labor market overall. However, total job cuts in 2025 surged to 1.21 million, up 58% year-on-year and the highest since 2020, led by the government sector—particularly federal layoffs—while technology topped private-sector cuts amid rapid AI adoption and prior over-hiring. At the same time, planned hires fell to 507,647, down 34% from 2024 and the weakest since 2010, underscoring continued caution in hiring despite the late-year slowdown in layoffs.

Bonds Commentary:  The 10-year U.S. Treasury yield fell to around 4.14%, extending its weekly decline as investors weighed mixed economic data and the Federal Reserve’s policy outlook. Softer labor indicators, including weaker job openings and private payroll growth, supported expectations that the Fed will hold rates steady this month, while markets continue to price two rate cuts later this year, despite a surprise improvement in services-sector activity and ahead of key labor market data due later this week.

Futures Update:  U.S. stock index futures edged lower in early Thursday trading, pulling back modestly from record highs as investors turned cautious ahead of key U.S. job market data due later in the week. Dow Jones futures declined about 0.3%, while S&P 500 and Nasdaq 100 futures each slipped around 0.2%.

Stocks experienced fluctuations throughout Wednesday’s trading session before closing relatively lackluster and mixed. The Dow and S&P 500 both pulled back after a strong start to the first full trading week of the year, while the NASDAQ, a tech heavyweight, showed only modest gains to the upside. The S&P 500 rose by 42.79 points, or 0.62%, finishing at 6,944.83. From a technical standpoint, the index remains above its key support zone and continues its upward momentum. The 14-day Relative Strength Index (RSI) stays above the midpoint, indicating sustained positive sentiment. The critical support level is around 6,877—an important threshold that could prompt a rebound—while resistance is likely near 6,990.