Late Holiday Rally Lifts Stocks:
Stocks posted solid gains across the board in an action-packed week of market-moving economic data, geopolitical news, and bullish new year sentiment.
The S&P 500 Index gained 1.57%, while the Nasdaq Composite Index added 1.88%. The Dow Jones Industrial Average rose 2.32%. The MSCI EAFE Index, which tracks developed overseas stock markets, advanced 1.41%.1,2
Source: Bloomberg Finance, L.P. (Performance data normalized 1/2/26 = 0)
Santa Visits Dow, But Not S&P, Nasdaq
Stocks rose early Monday, led by the Dow Industrials, as investors looked past the news from Venezuela.
By Monday’s close, the Dow Industrials had gained enough to make the “Santa Claus Rally” a reality, pushing the Average to a 1.1% gain for the seven-session period (the last five trading days of 2025 and the first two of 2026). However, the S&P and Nasdaq came up short.3
All three major averages continued their rise through midweek as the AI trade—led by chip manufacturers—helped momentum. The Dow Industrials crossed the 49,000 level for the first time, and both the S&P 500 and Dow hit record closes as well as all-time intraday highs.4
The Dow then moved back into the “pole position” over the next session as investors appeared to rotate out of technology stocks and into other sectors, including cyclical stocks. Defense stocks got a boost from the president’s call for a $1.5 trillion annual defense budget in 2027—higher than the Pentagon’s target.5,6
The December jobs report, released on Friday, showed modest job gains and a slight decline in the unemployment rate. Investors cheered the news, believing the update gave the Fed some flexibility with rates at its January meeting.7
Sources: U.S. Department of the Treasury, Board of Governors of the Federal Reserve System, Charles Schwab
Jobs Report
The Labor Department’s latest employment report showed a net gain of 50,000 jobs last month while unemployment ticked down to 4.4%, missing economists’ expectations of 73,000 jobs.7
Over the full year, net job growth averaged 49,000 per month—the lowest monthly pace in 22 years and a drop from 168,000 per month in 2024. Federal job cuts were a primary reason for the sluggish labor market in 2025, with 277,000 government positions eliminated.7
This Week: Key Economic Data
Source: Bloomberg Finance L.P.
This Week: Companies Reporting Earnings
Source: EarningsWhispers
Author
Gary Aiken
Chief Investment Officer
Concord Asset Management
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Footnotes and Sources
1WSJ.com, January 9, 2026
2Investing.com, January 9, 2026
3CNBC.com, January 5, 2026
4CNBC.com, January 6, 2026
5CNBC.com, January 7, 2026
6WSJ.com, January 8, 2026
7CNBC.com, January 9, 2026
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