NEW YORK, January 1, 2026, 13:55 ET — Market closed
Key points
- U.S. industrials eased in the final trading session of 2025, with the sector’s main ETF ending lower in thin year-end trade.
- Pentagon contract awards to Boeing and Lockheed Martin kept aerospace and defense names in focus heading into 2026.
- Investors are lining up the next catalysts: early-January factory surveys and late-month earnings from bellwether industrials.
U.S. industrial stocks began 2026 with Wall Street shut for New Year’s Day, after the sector slipped in the year’s final session. The Industrial Select Sector SPDR Fund (XLI), a widely followed ETF that tracks large U.S. industrial companies, last closed down about 0.8% at $155.12.
The pause matters because industrials sit at the crossroads of global trade, manufacturing demand and interest-rate expectations. With markets reopening on Friday, investors are looking for fresh signals on whether the sector’s late-2025 momentum can extend into the first quarter.
Contract awards in aerospace and defense — one of the industrials sector’s biggest subgroups — are also shaping early positioning. Those awards can support multi-year revenue visibility, but stocks still tend to trade with the broader risk appetite day to day.
On Wednesday, U.S. stocks ended lower in light year-end trading, while posting big annual gains. “It’s frankly hard to find an asset class that did poorly outside of the U.S. dollar,” said Scott Ladner, chief investment officer at Horizon. Reuters
Within industrials, the S&P 500 Industrials index fell 0.87% on Dec. 31. Boeing (BA) slipped 0.6% to $217.12 and Caterpillar (CAT) fell 0.8% to $572.87, while GE Aerospace (GE) dropped 1.2% to $308.03 and Lockheed Martin (LMT) lost 0.9% to $483.67; Honeywell (HON) and RTX (RTX) also closed lower.
Boeing drew attention after the U.S. military awarded it a $2.7 billion contract for post-production support on Apache helicopters, the Pentagon said. Post-production support typically covers maintenance, spare parts and other services that keep aircraft flying after delivery.
Lockheed also landed fresh Pentagon business tied to foreign military sales — a U.S. government program for selling defense equipment to allies — with a contract carrying a ceiling value of $328.5 million for Taiwan-related needs, the Pentagon said.
Outside defense, transport and logistics names remained on watchlists as investors gauge demand for freight and parcel shipping as a read-through on the real economy. UPS (UPS) and FedEx (FDX) both ended lower in the final session of 2025.
Before Friday’s open, traders are watching for any macro releases that could shift rate bets, plus early signs of re-risking after year-end portfolio adjustments. A Scotiabank calendar listed U.S. construction spending as due on Jan. 2, though investors have also been monitoring the pace at which the data calendar normalizes after recent disruptions.
The next key factory read arrives Monday. The ISM Manufacturing PMI — a survey-based gauge of activity where readings below 50 signal contraction — is scheduled for release on Jan. 5 at 10:00 a.m. ET, with the ISM Services report due Jan. 7, according to ISM’s release calendar.
Earnings will take over later in the month. Boeing is estimated to report results on Jan. 27, and Caterpillar is estimated to report on Jan. 29, according to Nasdaq’s earnings calendars, events that typically reset expectations for delivery schedules, order backlogs and 2026 outlooks.
Technically, XLI remains near the top of its recent range: it ended 2025 about 2% below its 52-week high of $158.46, after a pullback that left the ETF still well above its $112.75 52-week low.
With markets closed on Thursday, the next clear test for industrial stocks is whether incoming factory and demand indicators confirm a steady start to 2026 — and whether defense awards and order books can offset the sector’s sensitivity to growth and policy headlines.
