Here’s what’s happening in the stock market today:
The stock market shows early weakness today with Dow and S&P 500 futures ticking lower, extending yesterday's pullback from record highs amid profit-taking and policy uncertainties. Defense stocks are rallying strongly on President Trump's push for massive military spending increases, while Treasury yields edge higher ahead of key jobs data.
Major Indices Performance 📊
Dow Jones Industrial Average futures fell slightly early Thursday, following a modest drop yesterday that snapped an early 2026 uptrend.
S&P 500 futures also declined marginally, with the index retreating from intraday records amid investor reassessment.
Nasdaq futures dipped as well, though tech giants like Nvidia and Alphabet provided some support in recent sessions.
Market Movers 🚀
Defense shares rallied sharply in pre-market: Kratos Defense (KTOS) up over 12%, AeroVironment (AVAV) +11.8%, Northrop Grumman (NOC) +8.5%, and L3Harris (LHX) +8.2%.
Other notable movers include AAR Corp (AIR) up 6.2% on strong earnings.
Smaller gainers from prior sessions like SMX (+76%) and RGC (+59%) highlight volatility in niche names.
Key Events Driving the Market 🗞️
President Trump proposed a $1.5 trillion military budget for 2027 and pressured firms like RTX on dividends, boosting defense optimism.
U.S. 10-year Treasury yields rose to 4.17%, adding pressure as investors eye Friday's jobs report.
Geopolitical tensions, including China's rare-earth export curbs to Japan, contributed to mixed Asian markets.
Investor Sentiment 👀
Traders remain cautious with subdued volumes, balancing Fed rate cut hopes against policy risks and yield rises.
Optimism persists in defense and AI sectors, but broader pause reflects profit-taking after strong early-year gains.
TRADE OF THE DAY:
BIDU
Name: Baidu, Inc.
Symbol: BIDU
Current Price: Approximately ~$143.35
Trade
Sell to Open: 1 BIDU Jan 23, 2026 131/125 Put Vertical
Total Credit Received: $73.00
Credit per Contract: $73.00 (assumes 1 contract = 100 shares)
Direction: Bullish
Probability of Profit (PoP): 84.3%
Potential ROI:
Max Risk (Loss): $527.00
ROI: ($73 ÷ $527) × 100 ≈ 13.9%
Trade Explained in Simple English:
This trade sells a 131 put and buys a 125 put on BIDU, both expiring January 23, 2026, creating a bull put spread. You collect $73 upfront and will keep it if BIDU stays above $130.27 at expiration. Your maximum loss is capped at $527 if the stock falls below $125. This is a bullish trade that benefits from BIDU staying above the break-even level with clearly defined risk and reward.
Wall Street Highlights:
News Beyond the Numbers
JPMorgan Chase finalized an agreement to take over the Apple Card program from Goldman Sachs, marking a significant shift in the credit card partnership after months of discussions. Read more.
Applied Digital's shares surged after the data center provider reported a remarkable 250% rise in quarterly revenue to $126.6 million, nearly breaking even on adjusted profit. Read more.
President Donald Trump criticized large institutional investors for buying single-family homes, prompting sharp drops in homebuilder stocks like D.R. Horton and PulteGroup. Read more.
Warner Bros. Discovery rejected a buyout bid from Paramount and urged shareholders to favor a rival offer from Netflix amid ongoing media merger talks. Read more.
Defense sector stocks jumped following signals from President Donald Trump about plans to increase military spending. Read more.
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