Market Insights Summary - Edward Jones
Daily Market Snapshot (January 6, 2026)
U.S. equity markets closed higher, with the S&P 500 gaining 0.6% and the Dow rising by 1%. Leadership was broad-based, with cyclical sectors like materials and industrials outperforming, alongside the defensive health care sector. The Russell 2000 Index, representing small-cap stocks, also saw strong returns, gaining over 1%.
Internationally, Asian markets were mostly higher, and European markets also traded up. Bond yields increased slightly, with the 10-year U.S. Treasury yield at 4.17% and the 2-year yield at 3.47%. In commodities, oil prices fell, while precious metals like gold and silver rose amid geopolitical tensions between the U.S. and Venezuela.
Labor Market Data in Focus
Investors are anticipating significant labor-market data this week, starting with the December ADP employment report and the November JOLTS job openings data. The December unemployment rate and nonfarm payrolls report are expected to show a slight decrease in the unemployment rate to 4.5% and an increase in nonfarm payrolls by 60,000. Despite a cooling labor market in 2025, with nonfarm payroll growth averaging 55,000, layoffs have remained limited. The unemployment rate is low at 4.6%, with weekly initial jobless claims averaging 226,000, well below the 30-year average.
Job growth is projected to average between 50,000 and 100,000 in 2026, with immigration policies potentially constraining labor supply growth, keeping the unemployment rate steady around 4.5%.
U.S. Stocks in Rare Territory
The S&P 500 achieved a 16.4% gain in 2025, marking the third consecutive year of over 10% returns. Historically, following three years of strong gains, the fourth year has seen modest returns, averaging just 1.5%. However, optimism for 2026 is supported by expected S&P 500 earnings growth of nearly 15%, which could sustain equity performance. Continued U.S. economic growth, aided by easing monetary policy and stimulative fiscal policy, is anticipated to support corporate profit growth.
Investors are advised to diversify across regions and sectors, especially given the concentration of the S&P 500 in the largest companies. A globally diversified approach is recommended, favoring equities over bonds.