MarketPulse Summary: Defensive Stocks Rotation Ahead of NFP

Author: Elior Manier

Date: January 8, 2026

Market Overview

The article discusses the current state of the financial markets as traders prepare for the upcoming Non-Farm Payroll (NFP) report. After a strong start to the year, the "Freedom Trade" momentum has slowed, with increasing concerns over geopolitical tensions, particularly regarding U.S. military engagements and President Trump's proposed military spending increase.

Geopolitical Concerns

Recent developments, including a meeting between U.S. Secretary of State Rubio and Greenland, highlight the significant stability challenges NATO faces. This backdrop of geopolitical uncertainty is causing traders to adopt a more cautious stance.

Labor Market Insights

On the economic front, the labor market appears to be improving, with fewer layoffs reported compared to previous months. This aligns with positive data from ADP and Jobless Claims reports, suggesting a strengthening labor market.

Sector Rotation

As the market approaches the NFP report, there is a noticeable shift towards defensive sectors. The technology sector, particularly affected by layoffs due to AI advancements, is seeing a rotation of investments into more stable sectors such as healthcare, consumer defensives, farming, industrials, and energy.

Index Performance and Technical Analysis

The article provides a detailed analysis of major U.S. indices:

• Dow Jones: Currently leading the market with a +0.56% increase, showing strong support levels and potential for further upside.
• Nasdaq: Exhibiting relative weakness with a -0.555% decline, raising concerns about a possible double top formation.
• S&P 500: Recently reached all-time highs but is showing mixed signals ahead of the NFP report.

Technical Levels

Key technical levels for trading are highlighted for each index:

• Dow Jones: Resistance at 49,500 to 49,676; support at 48,870.
• Nasdaq: Resistance at 25,700 to 25,850; support at 25,000 to 25,250.
• S&P 500: Resistance at 6,945 to 6,975; support at 6,913.

Conclusion

As the market awaits the NFP report, traders are advised to remain cautious and monitor sector rotations closely. The article emphasizes the importance of understanding institutional positioning and the potential implications of geopolitical developments on market dynamics.

For further insights, follow Elior Manier on Twitter/X for additional market news and updates.