S&P 500 and Defense Stocks Analysis - January 8, 2026
Author: James Hyerczyk
Published: January 8, 2026, 13:06 GMT+00:00
Market Overview
U.S. stock futures are experiencing a pullback as investors take profits following a rally that brought the S&P 500 and Dow to record highs. This profit-taking is occurring just ahead of the critical Non-Farm Payrolls (NFP) report scheduled for Friday, contributing to early selling pressure. Additionally, weakness in crude oil and gold prices is impacting the energy and materials sectors.
Current Futures Performance
- Dow Jones Industrial Average futures: 49044.00, down 195.00 (-0.40%)
- S&P 500 Index futures: 6945.50, down 17.75 (-0.25%)
- Nasdaq-100 futures: 25749.75, down 89.00 (-0.34%)
Defense Stocks Surge
In contrast to the overall market trend, defense stocks are surging in premarket trading. This rally follows President Trump's proposal for a $1.5 trillion military budget for 2027, which he described as a plan to build a "Dream Military." Notable gains include:
- Northrop Grumman: +8.84%
- Lockheed Martin: +7.98%
- RTX: +5.33%
- Kratos Defense: +11.20%
This surge marks a significant turnaround from the previous day's decline, where defense stocks fell over 3% after Trump indicated he would not allow dividends or stock buybacks until his concerns about the industry were addressed.
Energy Sector Reactions
Energy stocks are also rebounding following recent volatility in crude oil prices. The market is reacting to Trump's announcement regarding Venezuela potentially supplying up to 50 million barrels of oil to the U.S., which raised concerns about increased oil supply. In premarket trading, major energy companies are seeing slight gains:
- Exxon Mobil: +0.33%
- Chevron: +0.66%
- Halliburton: +1.00%
Gold Market Pressures
Gold miners are facing pressure due to expectations of a significant rebalancing in major commodity indexes, which is anticipated to lead to futures contract liquidations of approximately $6.8 billion. Newmont Corporation, for instance, is down 2.39% following a recent drop in gold prices.
Technical Analysis of S&P 500
From a technical perspective, the S&P 500 is testing key support levels after reaching a high of 7006.75. The current uptrend line is positioned at 6907.50, and the 50-day moving average is at 6885.00. If the index breaks below these levels, it could lead to further declines, potentially challenging the swing bottom at 6866.75.
Traders are advised to look for buying opportunities at the first test of these support levels, but a failure to hold could trigger a more significant downward momentum.
Conclusion
The market is currently in a state of flux, with profit-taking and position-squaring ahead of the NFP report influencing trading behavior. Defense stocks are an outlier, benefiting from government spending proposals, while energy and gold sectors are reacting to broader market dynamics and geopolitical developments.