Market Analysis Summary - January 8, 2026
Author: Bob Mason
Published: January 8, 2026
Key Points
- US stock futures fell due to rising geopolitical tensions from the US seizing Venezuelan oil.
- US labor market data is crucial as expectations for a March Fed rate cut fade.
- Despite short-term weakness, futures remain above key exponential moving averages (EMAs), maintaining a medium-term bullish outlook.
Geopolitical Tensions
President Trump announced the US has taken control of sanctioned Venezuelan crude oil, which has raised geopolitical risks and affected market sentiment. This move coincided with the seizure of a Venezuelan tanker sailing under a Russian flag, prompting a strong response from China, which criticized the US actions as a violation of international law.
China is the largest customer for Venezuelan oil, but Venezuela's contribution to China's overall oil imports is minimal, ranking outside the top ten suppliers for 2024.
US Jobs Report and Fed Rate Cut Bets
The US labor market data is expected to influence market sentiment significantly. Jobless claims and productivity figures are particularly important as they could impact expectations for a Fed rate cut in March. Recent data has cooled these expectations, leading to a decline in US stock futures.
As of January 7, the probability of a March Fed rate cut decreased from 48.5% to 43.1%.
Technical Analysis
Despite recent pullbacks, major indices like the Dow Jones, Nasdaq 100, and S&P 500 remain above their 50-day and 200-day EMAs, indicating a bullish short- to medium-term outlook. Key technical levels to watch include:
- Dow Jones: Resistance at 49,876 and 50,000; Support at 49,000 and 47,984 (50-day EMA).
- Nasdaq 100: Resistance at 26,000 and 26,399; Support at 25,384 (50-day EMA) and 24,500.
- S&P 500: Resistance at 7,007 and 7,500; Support at 6,844 (50-day EMA) and 6,500.
Medium-Term Outlook
The medium-term outlook remains cautiously bullish, supported by expectations of a dovish Fed and strong corporate earnings. However, potential risks include:
- A hawkish shift from the Bank of Japan (BoJ) that could narrow the US-Japan rate differential.
- Positive US economic data that could temper rate cut expectations.
- Escalating geopolitical tensions.
Conclusion
In summary, a robust US economy, a dovish Fed rate path, and strong corporate earnings support a cautiously positive short-term and a bullish medium-term outlook for US stock futures. Traders should monitor key economic indicators and geopolitical developments closely, as they will significantly influence market dynamics moving forward.