Morning Preview: January 05, 2026
Market Overview
U.S. futures are trending higher, particularly in the tech sector, as Nasdaq futures show significant gains. This follows a week of strong performance from memory stocks like Micron (MU) and Western Digital (WDC), which were the leading contributors to the S&P 500 in 2025. Optimism surrounding the rollout of artificial intelligence continues to drive interest in chip stocks.
Geopolitical Developments
A major geopolitical event occurred over the weekend as the U.S. launched an operation in Venezuela, resulting in the removal of President Nicolás Maduro. This operation has led to expectations of U.S. control over Venezuela's oil reserves. Despite the military action, reports indicate that production and refining facilities of the state oil company PDVSA remain intact. However, Venezuelan oil exports have already been significantly reduced due to previous U.S. sanctions.
Market Performance
Last week, the S&P 500 fell by 1.03%, the Nasdaq by 1.52%, and the Dow by 0.67%. The yield spread between 2-year and 10-year Treasuries widened to 71 basis points, the steepest in four years, indicating a shift in investor sentiment.
Global Market Reactions
Asian markets reacted positively, with the Nikkei Index rising by 2.97%, while European markets also saw gains, particularly in the German DAX and FTSE 100. In the energy sector, stocks like Chevron (CVX) and Halliburton (HAL) are experiencing early gains due to the U.S. military intervention in Venezuela.
Economic Indicators
Today’s economic calendar includes the ISM Manufacturing PMI for December, which will provide insights into the manufacturing sector's performance.
Sector News
Consumer Sector
Airlines such as American Airlines, Delta, and Southwest have canceled flights in the Caribbean due to the recent U.S. airstrikes in Venezuela. Estee Lauder has been upgraded to a Strong Buy by Raymond James, indicating a positive outlook for the company.
Energy Sector
Energy stocks are on the rise following the U.S. intervention in Venezuela, with expectations of increased interest from Western energy companies in the region. Secretary of State Marco Rubio has indicated that the administration anticipates strong investment interest in reviving Venezuela's oil sector.
Technology Sector
ASML has been upgraded to Outperform, and memory stocks are seeing a surge as Samsung and SK Hynix plan significant price hikes for server DRAM, driven by the AI boom.
Conclusion
The market is poised for a potential rebound following last week's losses, with significant movements expected in the energy and technology sectors due to geopolitical developments and ongoing trends in artificial intelligence.