NEW YORK, January 7, 2026, 17:25 EST — After-hours
- Dow ends down 0.94% after touching another record high intraday
- Trump signals curbs for Wall Street homebuyers and defense contractor payouts
- Traders turn to Friday’s U.S. payrolls report for the next rates cue
The Dow Jones Industrial Average (.DJI) fell 466 points, or 0.94%, to 48,996.08 on Wednesday, retreating from an intraday record as Trump policy comments hit financials and defense shares. JPMorgan dropped 2.3% after Wolfe Research downgraded it to “peer perform” from “outperform,” and “Rumors that the AI trade was done turned out not to be true,” said Jake Dollarhide of Longbow Asset Management, as Nvidia and Alphabet helped the Nasdaq end up 0.16%. 1
The blue-chip index had closed at a record 49,462.08 a day earlier, edging toward the 50,000 mark on a renewed burst of AI optimism that lifted chip and storage names. With fourth-quarter earnings season approaching, the S&P 500 is trading at about 22 times expected earnings versus a five-year average of 19, and Argent Capital’s Jed Ellerbroek said he expects “a very strong earnings season for Big Tech.” 2
Housing-linked shares turned lower after President Donald Trump said his administration was moving to ban Wall Street firms from buying up single-family homes and would ask Congress to codify it. “People live in homes, not corporations,” Trump wrote, framing the move as part of a broader push on the cost of living ahead of this year’s midterm elections. 3
Defense contractors also slid after Trump vowed to block dividends and share buybacks until arms production speeds up, a rare swipe at the sector’s capital-return playbook. Lockheed Martin fell 4.8% and Northrop Grumman dropped 5.5%, while RTX reversed earlier losses and was up 2.5% in after-hours trading, the report said. 4
On the data front, job openings fell 303,000 to 7.146 million in November and hiring dropped 253,000 to 5.115 million, keeping the labor market in what economists call a “no hire, no fire” state. “The November JOLTS estimates show a notable decline in job openings and little sign of deterioration in labor market conditions,” said Marc Giannoni, chief economist at Barclays. The Labor Department is expected to report on Friday that nonfarm payrolls rose 60,000 in December, and a U.S. Supreme Court decision on the legality of Trump’s sweeping global tariffs is also due that day. 5
For Dow traders, the tape has felt jumpy. Policy headlines are landing on rate-sensitive groups like banks and insurers, while money still crowds into a narrow set of AI winners when fear of missing out returns.
But the day’s drivers could fade quickly. Trump has not laid out how he would enforce the housing ban or the defense payout limits, and Friday’s jobs data could either revive rate-cut talk or push it out, with banks and industrials likely to swing with it.
The next test is the December jobs report on Jan. 9, with investors also watching for any fresh detail from Washington that turns today’s posts into something traders can actually price.
