New York, Jan 8, 2026, 17:06 EST — After-hours
- The Dow closed up 270 points as defense names rebounded on Trump’s budget comments
- Tech slid, pushing the Nasdaq lower even as the S&P 500 finished flat
- Traders now turn to Friday’s U.S. payrolls report and the start of big-bank earnings next week
The Dow Jones Industrial Average ended higher on Thursday, lifted by a rebound in defense stocks after President Donald Trump called for a sharply larger U.S. military budget. The Dow rose 270.03 points, or 0.55%, to 49,266.11; the S&P 500 edged up 0.01% and the Nasdaq fell 0.44%. Reuters
The market is trying to price two messages at once: a bigger spending push that could fatten defense backlogs, and a tougher line on contractors’ shareholder payouts. Trump said the 2027 military budget should be $1.5 trillion, versus $901 billion approved by Congress for 2026, though any increase would need lawmakers’ sign-off. Reuters
Rates traders also kept one eye on the data after a stretch of disrupted releases tied to last year’s long government shutdown. Weekly jobless claims rose 8,000 to 208,000, while a Reuters survey showed economists expect December payroll growth of 60,000 and an unemployment rate of 4.5%. “Firms are successfully doing more with less labor,” said Matthew Martin, senior U.S. economist at Oxford Economics. Reuters
Defense shares snapped back after Wednesday’s slide, with investors leaning on the idea that more spending would outweigh tighter rules on buybacks and dividends. Morgan Stanley analysts led by Kristine Liwag wrote: “A limit on capital return is an incremental negative, but the size is manageable.” Investing.com
Still, Trump’s executive order raised the stakes for the sector. The order said contractors would be barred from dividends and stock buybacks until they deliver “on time and on budget,” and it directed Pentagon chief Pete Hegseth to identify underperforming firms within 30 days, with changes to future contracts to follow. Reuters
Technology weighed, with Nvidia down 2.2%, Broadcom off 3.2% and Microsoft down 1.1%, as investors grew pickier on AI-linked names. “While AI is still hot, there are going to be winners and losers,” said Art Hogan, chief market strategist at B. Riley Wealth. GV Wire
Within the Dow, Home Depot and Sherwin-Williams did much of the heavy lifting, a reminder that the index is price-weighted — higher-priced stocks move it more. Home Depot rose $12.74 and Sherwin-Williams gained $9.59, together contributing about 137 points to the Dow’s advance, with Nike, Coca-Cola and Procter & Gamble also helping, MarketWatch reported. MarketWatch
Company headlines also kept a pulse on the index. JPMorgan Chase and Apple said the bank will become the new issuer of the Apple Card, replacing Goldman Sachs, in a deal expected to transfer more than $20 billion of card balances once completed; Goldman CEO David Solomon said the move “substantially completes” the narrowing of the firm’s consumer focus. Reuters
But the path into Friday looks messy: a big policy-driven bid for defense can collide with budget math and congressional friction, and a hot jobs print could push yields up again. Valuations are still “relatively pricey” heading into earnings season, with the S&P 500 trading around 22 times expected earnings — a price-to-earnings ratio — above its five-year average of 19, according to LSEG data. Reuters
Next up is Friday’s U.S. employment report for December — the nonfarm payrolls count, which excludes farm workers — due at 8:30 a.m. ET. Earnings season then starts to bite next week, with JPMorgan set for Jan. 13 and Goldman Sachs on Jan. 15. Bureau of Labor Statistics+2JPMorgan Chase…
