The first full trading week for US stocks in 2026: a major attack on non-agricultural investors keep an eye on the job market

The Zhitong Finance App learned that last Friday — the penultimate trading day in the “Santa Claus Market” cycle — US stocks closed. The Dow Jones index, which is mainly blue-chip stocks, led the rise. The S&P 500 index also rose, while the NASDAQ index fell slightly. Looking ahead to the week ahead, the first full trading week of 2026 will usher in full resumption of the release of economic data. The US non-farm payrolls report for December, which will be released on Friday, is expected to show a slowdown in recruitment activity in the last month of 2025. Economists expect the number of non-farm workers to increase by 55,000 in December, lower than the increase of 64,000 in November; in terms of the unemployment rate, which rose to a four-year high of 4.6% in November, it is expected to fall 0.1 percentage points in December. In addition, this week's economic calendar also includes: ADP's monthly private sector employment report, monthly layoff data released by Challenger, Gray & Christmas, and an early weekly unemployment claim report.

At the beginning of the new year, the labor market will be the top focus of the market's attention. All of these employment data will be closely watched to assess the possibility that the Federal Reserve will cut interest rates at a meeting later this month. However, traders currently expect an 85% chance that the Federal Reserve will keep the federal funds rate unchanged in the 3.5%-3.75% range at that time.

On the Federal Reserve side, investors will also pay close attention to whether US President Trump will announce nominations to replace current Federal Reserve Chairman Powell. Powell's term as chairman expires in May. Trump said at the end of last month that he expects to announce his successor in early January.

Service sector activity data and consumer confidence data will conclude the economic data schedule for the coming week. However, the corporate earnings schedule will remain light. Constellation Brands (STZ.US), Albertsons (ACI.US), JEF.US (JEF.US), and Applied Digital (APLD.US) will be the most noteworthy companies to announce quarterly results in the coming week. Major banks are expected to officially kick off a new earnings season in less than two weeks.

“A continuous wind of creative destruction”

Despite — or precisely because — the market experienced ups and downs during the year, 2025 is still a pretty good year for investors. The S&P 500 index rose more than 16% throughout the year, while the Nasdaq Composite Index led major stock indexes with gains of more than 20%. Notably, this performance was achieved against the backdrop of a sharp decline in April, which almost dragged the market into a bear market within a few days.

Adam Turnquist (Adam Turnquist), chief technical strategist at LPL Financial, said: “The US economy has shown extraordinary resilience, successfully overcoming multiple adverse factors such as high inflation, a slowdown in the labor market, fewer interest rate cuts than initially anticipated, and a sharp rise in effective tariff rates.”

The stock price of Nvidia (NVDA.US), the world's leading chip maker, rose more than 30% in 2025, while Google (GOOGL.US), another “Big Seven” member, led the tech giant camp with an increase of more than 60%. Notably, these two stocks were the only members of the “Big Seven” that outperformed the S&P 500 index last year.

Goldman Sachs strategist Peter Oppenheimer (Peter Oppenheimer) pointed out in the bank's 2026 Global Outlook Report that despite high valuation levels and sharp increases in stock prices, the growth of the tech industry is not just an “AI story without other support points.” Instead, he said the industry has continued to perform strongly since the financial crisis, “underpinned by outstanding profit growth.”

Oppenheimer also pointed out that compared to previous bubble periods (such as the peak of the internet bubble in the early 21st century), current valuations are not that extreme, and market speculation is far less irrational than it was back then. “The rise in scale and influence of the tech industry, particularly in the US stock market, is not due to irrational speculation about the future, but from unusually strong fundamental growth,” he said.

Overall, according to Bank of America data, Wall Street strategists on average expect the S&P 500 to rise about 10% over the next year. However, the question facing investors in 2026 is whether the upward trend driven by technology and AI themes over the past year can continue — especially at the level of individual stocks, where investors have begun to gradually move away from the dominant “Big Seven”.

Nicole Inui (Nicole Inui), a stock strategist at HSBC Bank, wrote in the bank's 2026 outlook that the 2025 stock market performance “was a highly concentrated round of markets rather than widespread growth.” She pointed out that the equal-weighted S&P 500 index has outperformed the market capitalization-weighted S&P 500 index for the third year in a row. After Trump announced the “Liberation Day” tariffs, which were later retracted, the tech sector contributed about 90% of the return after the market rebound.

But that doesn't mean that these companies' strong performance is unsustainable. In a report sent to clients, Eric Teal (Eric Teal), the chief investment officer of Comerica Wealth Management, compared the current market to “a continuous storm,” a statement derived from Austrian economist Joseph Schumpeter (Joseph Schumpeter).

Till wrote, “Capitalist economies are often swept by a 'continuous wind of creative disruption' — a wind of innovation. However, this progress is a natural process of continuous industrial evolution. Although it will bring drastic economic changes, it will also bring huge benefits to society and businesses.”

In a context where AI trading is already highly popular and is beginning to face real-world obstacles, how this “continuous storm” will sweep through the market in 2026 may become the main story investors are most concerned about.