By Anna Szymanski
What matters in U.S. and global markets today
By Anna Szymanski, Editor-in-Charge, Reuters Open Interest
Global investors are trying to get their bearings amid a flood of geopolitical headlines – mostly courtesy of the U.S. president. Wall Street slipped on Wednesday after touching a record high earlier in the session, Asian stocks traded down today and oil stabilized after dropping sharply yesterday on news of U.S. plans to buy sanctioned Venezuelan crude.
And in the latest twist in the ‘Donroe Doctrine’ drama, U.S. President Donald Trump called for a more than 50% increase in the U.S. defense budget by 2027 and threatened to block defense contractors from paying dividends or buying back shares unless they ramped up weapons production.
We’re only one week into 2026 folks. Hang on for a bumpy ride!
I’ll get into all of the market-moving news below, but first check out the latest episode of the Morning Bid daily podcast. Subscribe to hear Reuters journalists discuss the biggest news in markets and finance seven days a week.
Today’s Market Minute
* Samsung Electronics on Thursday projected a three-fold jump in fourth-quarter operating profit from a year earlier to a record high as tight supply and a surge in artificial intelligence-driven demand stoked prices for conventional memory chips
* Warner Bros Discovery’s board unanimously turned down Paramount Skydance’s latest attempt to acquire the studio, saying its revised $108.4 billion hostile bid amounted to a risky leveraged buyout that investors should reject.
* Nvidia is requiring full upfront payment from Chinese customers seeking its H200 artificial intelligence chips, hedging it against ongoing uncertainty over Beijing’s approval of the shipments, said two people briefed on the matter.
* President Donald Trump is tearing up the global energy playbook as the administration seeks to dominate the Western Hemisphere. China may be the ultimate target of this ‘Donroe Doctine’, but U.S. oil companies could become the unintended casualties, argues ROI energy columnist Ron Bousso.
* The new year has got off to a roaring start for U.S. equities and investors are anticipating a fourth consecutive year of double-digit returns. But elevated valuations could yet spoil the party, warns ROI markets columnist Jamie McGeever.
Trump’s visible hand
Trump said on Wednesday that the U.S. military budget should rise to $1.5 trillion in 2027, well above the $901 billion approved by Congress for 2026. Such a move would require congressional approval, and budget experts are sceptical about the feasibility of such a dramatic increase.
Shares in European arms makers hit a new record high early on Thursday on the back of the news.
U.S. defense stocks are also up but only after being jostled by an executive order released by the White House on Wednesday that called for curbs on defense contractors’ ability to return cash to shareholders:
“Effective immediately, they are not permitted in any way, shape, or form to pay dividends or buy back stock, until such time as they are able to produce a superior product, on time and on budget.”
During afternoon trading in New York, shares of defense giants Lockheed Martin fell 4.8%, Northrop Grumman slid 5.5%, and General Dynamics dropped 3.6%. Raytheon, a unit of RTX, was singled out by Trump in a Truth Social post, sending the company’s shares down 2%. But all have bounced back in afterhours trading.
Oil prices steadied on Thursday after two days of declines. Trump said on Tuesday that the U.S. would sell up to 50 million barrels of crude oil stuck in Venezuela under U.S. sanctions.
To enable this, the U.S. is “selectively rolling back sanctions” on Venezuelan oil, White House Press Secretary Karoline Leavitt told reporters on Wednesday.
U.S. Energy Secretary Chris Wright also noted yesterday that the revenue from sales of Venezuelan oil would be used to stabilize the country’s economy and eventually repay oil majors Exxon Mobil and ConocoPhillips for losses suffered when their assets were nationalized by former Venezuelan President Hugo Chavez nearly 20 years ago.
Over in Asia, shares of Japanese chemical manufacturers dropped on Thursday while those of their Chinese rivals rose after Beijing’s commerce ministry announced it was launching an anti-dumping probe into imports of dichlorosilane, a chemical used in chipmaking, from Japan. This is yet another sign of the strained bilateral ties between the two nations.
Away from the geopolitical headlines, investors got some U.S. labor market data yesterday, though it offered little clarity.
The JOLTS report showed that U.S. job openings fell to a 14-month low in November while hiring remained sluggish. Employers appear loath to lay off workers, but the quit rate is also low, suggesting workers aren’t optimistic about finding new jobs.
ADP’s national employment report showed that private employment rose by 41,000 jobs last month after dropping by 29,000 in November, but investors won’t pay this too much heed, as the ADP figures often diverge significantly from the official government data that drives the Federal Reserve’s interest rate decisions.
The real labor market news is the release of the December non-farm payrolls report on Friday. It is expected to show a drop in the unemployment rate to 4.5% from 4.6% in November.
Would such a move significantly increase the likelihood of more Fed easing? Almost certainly not. For that, we would need to see a more significant move in the unemployment rate toward 5% – something few economists anticipate in the near term.
Chart of the day
Venezuela’s oil production has dropped precipitously since the early 1970s, falling to around 1 million bpd in 2025, or just 1% of global production, down from a peak of 3.7 million bpd in 1970. Production unwound amid the OPEC embargo and the nationalization of the country’s oil industry under Petróleos de Venezuela, S.A. (PDVSA).
Volumes recovered in the late twentieth century before declining during the presidencies of Hugo Chávez and Nicolas Maduro, reaching a low of around 665,000 bpd in 2021 after the U.S. placed sanctions on PDVSA.
Today’s events to watch
* U.S. initial jobless claims (8:30 AM EDT), trade deficit (8:30 AM EDT), Q3 productivity (8:30 AM EDT), consumer credit (3:00 PM EDT) * U.S. corporate earnings: Acuity Brands, Commercial Metals, Greenbrier Companies, Lindsay Corp, RPM International, TD Synnex
Want to receive the Morning Bid in your inbox every weekday morning? Sign up for the newsletter here. You can find ROI on the Reuters website, and you can follow us on LinkedIn and X.
Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
(By Anna Szymanski; Editing by Kirsten Donovan)
Comments