U.S. Stocks Mixed as Investors Take Profits on AI Shares... Defense Stocks Surge

Dow Holds Firm While S&P and Nasdaq Decline
Lockheed Martin Surges 6.84% on Trump's Defense Budget Comments
Market Eyes December Jobs Report Due on January 9
Geopolitical Factors in Focus: Venezuela and Greenland

The three major indices of the U.S. stock market showed mixed movements on January 8 (local time). Investors began to realize profits, particularly in artificial intelligence (AI)-related stocks, exerting downward pressure on some indices. In contrast, defense industry stocks were strong, buoyed by U.S. President Donald Trump's indication of an increase in the national defense budget.

Traders are working on the floor of the New York Stock Exchange (NYSE) in the United States. Photo by Reuters Yonhap News Agency

As of 10:37 a.m. on the New York Stock Exchange, the Dow Jones Industrial Average, which focuses on blue-chip stocks, was up 159.55 points (0.33%) from the previous trading day, standing at 49,155.63. The S&P 500, centered on large-cap stocks, was down 6.63 points (0.1%) at 6,914.3, while the tech-heavy Nasdaq was down 164.576 points (0.7%) at 23,419.699.

By stock, Nvidia was down 1.8%. Oracle was down 2.76%, and Palantir fell 1.5%. Meta, the parent company of Facebook, and Apple both declined, falling by 1% and 1.29%, respectively. In contrast, defense contractors Northrop Grumman and Lockheed Martin surged by 4.73% and 6.84%, respectively. These gains reflect expectations following President Trump’s announcement the previous day that he would set next year's defense budget at $1.5 trillion, more than a 50% increase.

Natalia Lipkina, Head of EMEA Equity Strategy at JP Morgan Private Bank, commented, "After several days of gains, we are seeing some profit-taking," adding, "Geopolitical risks remain quite elevated, and the market is now preparing for the upcoming earnings season."

Investors are closely watching the U.S. Department of Labor's Bureau of Labor Statistics (BLS) December employment report, which is set to be released on January 9. This report is considered a key indicator for gauging the Federal Reserve's interest rate path for this year. The market expects nonfarm payrolls to increase by 73,000 in December, surpassing November's figure of 64,000. The unemployment rate is projected to fall by 0.1 percentage point from the previous month to 4.5%.

Geopolitical factors, such as heightened tensions surrounding Venezuela and moves to bring Greenland under U.S. influence, are also major points of interest for the market. Previously, U.S. Secretary of State Marco Rubio stated that he would hold talks with Denmark next week regarding issues involving Greenland, a Danish autonomous territory, and mentioned that all options, including military measures, are being considered to secure Greenland.

Yields on U.S. Treasury bonds are generally trending upward. The yield on the 10-year U.S. Treasury bond, the global benchmark for bond rates, was up 4 basis points (1bp = 0.01 percentage point) from the previous day, reaching 4.18%. The yield on the 2-year U.S. Treasury bond, which is sensitive to monetary policy, was up 1 basis point from the previous day, trading at around 3.48%.