Market Insights Summary - Edward Jones
Daily Market Snapshot - January 7, 2026
On January 7, 2026, the stock market exhibited mixed results. The Nasdaq index advanced while the Dow Jones Industrial Average (DJIA) slipped after reaching record highs. This divergence occurred amidst ongoing geopolitical developments and anticipation of key U.S. labor data.
Bonds rallied, leading to lower yields, influenced by weaker-than-expected German retail sales, moderating eurozone inflation, and a decline in total U.S. job openings. Oil prices fell following President Trump's announcement regarding Venezuela's oil shipments to the U.S., which aims to increase control over the country's industry. Additionally, Trump threatened to pause capital returns for defense contractors and proposed a ban on single-home purchases by institutional investors, impacting shares of defense companies and asset managers.
In corporate news, Warner Bros. Discovery rejected a bid from Paramount, citing it as inferior to their existing deal with Netflix. Precious metals, after a strong performance in 2025, saw declines today.
Market Trends
As the new year begins, small-cap and value stocks are leading early gains. Despite geopolitical volatility, major indexes have reached new highs. The current market environment suggests that these developments do not significantly alter the near-term economic outlook or oil supply, which are key factors for market participants. A pro-cyclical rally is evident, with small-cap stocks outperforming large-caps and value investments surpassing growth stocks, supported by expected earnings momentum.
Labor Market Insights
Private payrolls, as reported by ADP, increased by 41,000 in December, aligning with consensus expectations. This moderate growth indicates a stabilizing labor market after a recent soft patch. Notably, firms with fewer than 50 employees added jobs for the first time in four months. The upcoming December employment report is anticipated to have significant implications for Federal Reserve policy. The unemployment rate rose to 4.6%, primarily due to more workers re-entering the labor force. The current low-hiring, low-firing environment is expected to persist, with monthly job gains projected to firm into the 50,000–100,000 range, while a smaller labor supply keeps unemployment near 4.5% in 2026.