U.S. stocks were mixed on Thursday as investors weighed geopolitical developments alongside labor market data ahead of Friday’s closely watched jobs report. The divergence reflected a market balancing renewed strength in industrials and defense against continued pressure on large-cap tech stocks.
The Dow Jones Industrial Average climbed about 0.5%, supported by gains in defense and cyclicals, while the S&P 500 hovered near flat after pulling back from record highs. The tech-heavy Nasdaq Composite slid roughly 0.5%, dragged lower by declines in megacap names as investors trimmed exposure to growth stocks amid lingering uncertainty around interest rates and global tensions.
Market Movers:
- Neogen (NEOG) surged after the food and animal safety company beat fiscal second-quarter expectations and raised its full-year outlook, signaling improving execution despite modest revenue declines. Investors focused on stronger-than-expected margins and higher EBITDA guidance, viewing the update as a turning point following a challenging integration period.
- Applied Digital (APLD) jumped after reporting triple-digit revenue growth and announcing new hyperscaler leases at its North Dakota data centers. Management’s commentary around rising inbound demand and potential new hyperscaler partnerships reinforced optimism around long-term AI infrastructure spending.
- Globus Medical (GMED) advanced after issuing an upbeat revenue and earnings outlook for both the fourth quarter and full year. Strong procedural demand and integration progress following recent acquisitions helped lift confidence in sustained growth into 2026.
- Lockheed Martin (LMT) climbed as defense stocks broadly rallied following President Trump’s comments proposing a sharply higher U.S. defense budget. The remarks reignited expectations for increased government spending across weapons systems, aerospace, and defense services.
- Gap (GAP) gained after an analyst upgrade highlighted improving brand momentum, stabilization at Athleta, and the potential for accelerating earnings growth next year. Investors also welcomed expectations for increased share buybacks and improving operating leverage.
- Teleflex (TFX) slid after the medical device maker cut its revenue outlook and announced a CEO transition. The revised guidance raised concerns about near-term execution risks and visibility following leadership changes.
- Canadian Solar (CSIQ) fell after announcing a convertible debt offering, with investors reacting negatively to potential dilution despite the company’s plans to invest in U.S. manufacturing and energy storage expansion.
- Alcoa (AA) declined after a downgrade citing valuation concerns following a sharp rally. While fundamentals remain solid, analysts pointed to rising global aluminum inventories and less favorable risk-reward at current levels.
Defense Spending and Geopolitics Take Center Stage
Defense stocks rebounded as investors reassessed Washington’s long-term commitment to military spending. President Trump’s proposal to lift annual defense budgets to $1.5 trillion revived expectations for sustained order flow across the defense sector, reversing some of the pressure seen earlier this week when the administration threatened restrictions on buybacks and dividends.
Meanwhile, geopolitical uncertainty tied to Venezuela and broader U.S. foreign policy continues to influence market sentiment. While investors appear less concerned about immediate economic fallout, energy, industrial, and defense names remain sensitive to shifting rhetoric and policy signals.
Labor Market Signals Keep Investors Cautious
Fresh labor data painted a mixed picture of the U.S. economy. Weekly jobless claims came in below expectations, while planned layoffs fell to their lowest level of 2025 in December, pointing to stabilization after a volatile year. However, other reports showed subdued hiring activity, reinforcing uncertainty about the strength of labor demand.
These updates set the stage for Friday’s monthly jobs report, which could prove pivotal for interest rate expectations. With the Federal Reserve signaling patience, markets remain highly sensitive to any data that could shift the policy outlook.
Tech Weakness Continues as Valuations Face Scrutiny
Technology stocks continued to lag, with megacaps weighing on the Nasdaq as investors reassessed valuations following a strong multi-year run. While AI remains a dominant long-term theme, near-term profit-taking and rate sensitivity have prompted rotation into more defensive and cyclical areas of the market. At the same time, select pockets of tech tied to infrastructure, data centers, and defense-adjacent innovation continued to attract capital, underscoring a more selective approach to growth investing in early 2026.
Looking Ahead
Investors now turn their attention to Friday’s jobs report, which could shape expectations for Federal Reserve policy in the months ahead. Markets are also likely to remain sensitive to developments around defense spending, tariffs, and global geopolitics as 2026 unfolds. With earnings season approaching and volatility lingering, positioning appears increasingly selective as Wall Street searches for clarity on growth, inflation, and policy direction.
