Macro Overview
Markets displayed a distinct “risk-off” defensive posture on Thursday, January 8, as investors rotated out of high-flying technology names in favor of value and defense-linked equities. While the S&P 500 (IVV) remained virtually flat with a marginal -0.01% decline, the underlying narrative was one of sector divergence. The Dow Jones Industrial Average gained ground behind a massive rally in defense contractors following reports of proposed $1.5 trillion military spending for 2027. Conversely, the Nasdaq Composite retreated as scrutiny over AI-related capital expenditures weighed on semiconductor and software giants. This internal market rotation comes as rising 10-year Treasury yields, which climbed to 4.17%, exerted pressure on growth valuations ahead of today’s high-stakes monthly jobs data.
U.S. Size & Style
The style gap widened significantly during the session, with value strategies decisively outperforming growth across all market capitalizations. Small Value (IJS) was the clear leader, surging +2.07%, while Large Growth (IVW) lagged with a -0.83% decline. This performance reflects a broadening of market participation away from mega-cap tech, as mid-cap and small-cap blend indices like Mid Cap (IJH) (+0.37%) and Small Cap (IJR) (+1.41%) notched gains.
| Name (Ticker) | 1-Day % Change | WTD | 1 Month | 3 Month | YTD | 1 Year |
|---|---|---|---|---|---|---|
| Large Value (IVE) | +0.95% | 1.61% | 2.79% | 4.20% | 1.95% | 15.06% |
| Large Cap (IVV) | -0.01% | 0.93% | 1.16% | 2.75% | 1.11% | 18.45% |
| Large Growth (IVW) | -0.83% | 0.32% | -0.18% | 1.53% | 0.38% | 21.21% |
| Mid Value (IJJ) | +1.41% | 2.91% | 4.60% | 5.45% | 4.07% | 11.39% |
| Mid Cap (IJH) | +0.37% | 2.39% | 3.99% | 4.62% | 3.80% | 10.68% |
| Mid Growth (IJK) | -0.68% | 1.87% | 3.34% | 3.84% | 3.46% | 9.72% |
| Small Value (IJS) | +2.07% | 4.21% | 5.48% | 7.99% | 5.09% | 12.64% |
| Small Cap (IJR) | +1.41% | 3.38% | 4.07% | 5.65% | 4.40% | 10.39% |
| Small Growth (IJT) | +0.78% | 2.63% | 2.73% | 3.48% | 3.72% | 8.23% |
U.S. Sectors & Industries
Sector performance was dominated by cyclical and defensive groups, with Energy (XLE) climbing +3.15% on a bounce in crude prices. Consumer Staples (XLP) also outperformed with a +2.38% gain, highlighting the cautious sentiment. Standout strength was seen in Aerospace & Defense (XAR), up +2.32%, as Lockheed Martin (LMT) and Northrop Grumman (NOC) surged on geopolitical spending tailwinds. In contrast, Technology (XLK) was the day’s laggard, falling -1.56% as high-flying semiconductor names like Micron and Nvidia saw profit-taking.
| Sector (Ticker) | 1-Day % Change | WTD | 1 Month | 3 Month | YTD | 1 Year |
|---|---|---|---|---|---|---|
| Energy (XLE) | +3.15% | 1.97% | 3.35% | 5.52% | 4.12% | 9.30% |
| Consumer Staples (XLP) | +2.38% | 0.97% | 1.62% | 1.65% | 0.98% | 4.14% |
| Materials (XLB) | +1.76% | 2.99% | 9.80% | 6.21% | 4.74% | 15.11% |
| Consumer Discretionary (XLY) | +1.67% | 3.86% | 4.38% | 4.20% | 2.94% | 11.17% |
| Industrials (XLI) | +0.75% | 1.39% | 4.09% | 3.29% | 3.26% | 22.23% |
| Real Estate (XLRE) | +0.75% | 0.15% | 0.34% | -1.07% | 0.22% | 4.16% |
| Financial (XLF) | +0.52% | 1.77% | 4.89% | 4.83% | 2.06% | 16.87% |
| Communication Services (XLC) | +0.33% | 0.50% | 1.37% | 1.97% | -0.20% | 22.25% |
| Utilities (XLU) | +0.29% | -2.76% | -0.97% | -6.82% | -1.64% | 13.62% |
| Health Care (XLV) | -0.96% | 1.68% | 4.86% | 9.88% | 2.14% | 14.57% |
| Technology (XLK) | -1.56% | -0.04% | -2.15% | -0.61% | 0.19% | 24.10% |
Global Thematic
Thematic performance saw significant divergence as the home construction and cannabis themes rallied while high-growth disruption suffered. iShares U.S. Home Construction (ITB) led the complex with a +4.22% gain, followed closely by Amplify Seymour Cannabis (CNBS) at +3.22%. Conversely, the ARK Genomic Revolution (ARKG) fell -3.68%, marking it as a major laggard amid the broader pullback in biotech and genomics.
| Name (Ticker) | 1-Day % Change |
|---|---|
| iShares U.S. Home Construction ETF (ITB) | +4.22% |
| AdvisorShares Pure US Cannabis ETF (MSOS) | +4.15% |
| SPDR S&P Homebuilders ETF (XHB) | +3.73% |
| Amplify Seymour Cannabis ETF (CNBS) | +3.22% |
| Amplify Alternative Harvest ETF (MJ) | +3.02% |
| VanEck Rare Earth and Strategic Metals ETF (REMX) | -3.01% |
| Tortoise AI Infrastructure ETF (TCAI) | -3.38% |
| ARK Genomic Revolution ETF (ARKG) | -3.68% |
| Sprott Nickel Miners ETF (NIKL) | -3.70% |
Developed Markets ex-U.S.
International developed markets remained stable, with Developed ex-U.S. (EFA) edging up +0.01%. Canada (EWC) was a relative outlier, gaining +0.83% as energy strength supported the commodity-sensitive Loonie and local equity market. Conversely, the Netherlands (EWN) fell -0.99%, likely impacted by the broader weakness in European technology and semiconductor equipment stocks.
| Country (Ticker) | 1-Day % Change | WTD | 1 Month | 3 Month | YTD | 1 Year |
|---|---|---|---|---|---|---|
| Dev ex-U.S. (EFA) | +0.01% | 0.93% | 4.41% | 5.25% | 1.99% | 33.09% |
| Australia (EWA) | +0.38% | -0.38% | 2.22% | -1.49% | 0.69% | 11.79% |
| Canada (EWC) | +0.83% | 0.50% | 3.77% | 7.45% | 0.98% | 35.58% |
| France (EWQ) | +0.13% | 0.33% | 2.33% | 3.14% | 1.04% | 29.36% |
| Germany (EWG) | +0.12% | 1.76% | 4.77% | 2.29% | 1.91% | 35.96% |
| Hong Kong (EWH) | +0.32% | 1.19% | 4.71% | 6.07% | 4.14% | 44.94% |
| Japan (EWJ) | -0.07% | 1.88% | 3.37% | 5.20% | 2.63% | 29.20% |
| Netherlands (EWN) | -0.99% | 0.97% | 4.69% | 5.25% | 3.82% | 38.10% |
| South Korea (EWY) | -0.41% | 4.28% | 14.67% | 29.49% | 9.64% | 100.69% |
| Switzerland (EWL) | -0.17% | -0.22% | 4.24% | 5.95% | 0.42% | 30.54% |
| U.K. (EWU) | +0.25% | 0.31% | 5.54% | 6.53% | 1.41% | 36.58% |
Emerging Markets
Emerging markets showed mixed results with Emerging (EEM) finishing up +0.04%. Mexico (EWW) led the gains with an +0.80% return, while China (MCHI) followed with +0.65% as domestic stimulus hopes persisted. However, India (INDA) saw a notable -0.89% pullback, and South Africa (EZA) dropped -1.55%, reflecting volatility in non-U.S. dollar-denominated assets as the greenback gained strength.
| Country (Ticker) | 1-Day % Change | WTD | 1 Month | 3 Month | YTD | 1 Year |
|---|---|---|---|---|---|---|
| Emerging (EEM) | +0.04% | 1.12% | 5.62% | 5.87% | 3.95% | 39.33% |
| Brazil (EWZ) | +0.55% | 2.11% | 4.00% | 14.03% | 3.49% | 51.64% |
| China (MCHI) | +0.65% | 0.06% | 1.33% | -4.66% | 3.68% | 41.69% |
| India (INDA) | -0.89% | -1.54% | 1.21% | 2.07% | -0.61% | 2.66% |
| Indonesia (EIDO) | -0.21% | 0.96% | 1.61% | 9.88% | 1.55% | 7.24% |
| Malaysia (EWM) | -0.26% | -0.22% | 5.60% | 6.82% | 0.00% | 18.37% |
| Mexico (EWW) | +0.80% | 1.18% | 4.68% | 9.31% | 1.66% | 52.62% |
| South Africa (EZA) | -1.55% | 1.35% | 11.77% | 11.09% | 2.24% | 80.05% |
| Taiwan (EWT) | -0.23% | 1.03% | 4.40% | 4.27% | 3.01% | 30.42% |
| Thailand (THD) | -2.13% | -0.45% | 1.60% | 0.27% | -0.05% | 4.30% |
Fixed Income
Fixed income markets were under pressure as the benchmark 10-year Treasury yield climbed to 4.17%, driven by deficit concerns and robust fiscal spending projections. Long-duration assets were the hardest hit, with Government Long (SPTL) falling -0.41%. Shorter-duration and income-focused niches proved more resilient; Taxable High Yield (HYG) gained +0.07%, and Bank Loans (BKLN) rose +0.05% as their floating-rate characteristics attracted interest in a rising-rate environment.
| Category (Ticker) | 1 Day | WTD | 1 Month | 3 Month | YTD | 1 Year |
|---|---|---|---|---|---|---|
| Taxable Core (AGG) | -0.18% | 0.09% | 0.40% | 0.79% | 0.06% | 7.72% |
| Taxable Core Enhanced (IUSB) | -0.19% | 0.09% | 0.40% | 0.87% | 0.06% | 7.93% |
| Taxable Multisector (PYLD) | -0.11% | 0.15% | 0.93% | 1.91% | 0.26% | 9.99% |
| Taxable Ultrashort (BIL) | 0.00% | 0.03% | 0.31% | 0.95% | 0.08% | 4.14% |
| Taxable Short-Term (BSV) | -0.08% | 0.01% | 0.43% | 1.03% | 0.00% | 6.06% |
| Taxable Long Term (BLV) | -0.40% | 0.32% | -0.06% | -0.42% | 0.13% | 7.99% |
| Government Short (SPTS) | -0.03% | 0.03% | 0.46% | 1.01% | 0.00% | 5.15% |
| Government Intermediate (SPTI) | -0.21% | 0.07% | 0.36% | 0.88% | 0.00% | 7.65% |
| Government Long (SPTL) | -0.41% | 0.34% | 0.08% | -0.47% | 0.15% | 6.99% |
| Inflation Protected (TIP) | -0.20% | 0.15% | 0.13% | -0.18% | 0.11% | 6.84% |
| Corporate (SPIB) | -0.12% | 0.00% | 0.43% | 1.07% | 0.03% | 8.17% |
| Taxable High Yield (HYG) | +0.07% | 0.33% | 0.96% | 1.82% | 0.38% | 8.61% |
| Bank Loans (BKLN) | +0.05% | 0.19% | 0.83% | 2.38% | 0.24% | 6.88% |
| Preferred Stock (PFF) | -0.10% | 0.35% | 1.87% | 0.32% | 1.36% | 6.12% |
| Convertible (CWB) | -0.29% | 1.41% | 1.39% | -0.50% | 2.95% | 19.14% |
| Mortgage Backed (MBS) | -0.10% | 0.09% | 0.70% | 1.19% | 0.01% | 9.00% |
| International USD (BNDX) | 0.00% | 0.46% | 0.61% | 0.50% | 0.43% | 3.97% |
| International (IGOV) | -0.31% | -0.07% | 0.67% | -0.05% | -0.22% | 11.12% |
| Emerging USD (EMB) | -0.16% | -0.30% | 0.48% | 2.19% | -0.28% | 13.27% |
| Emerging (EMLC) | -0.23% | -0.04% | 1.72% | 3.31% | 0.19% | 18.52% |
| Municipal Short (SUB) | -0.03% | 0.12% | 0.53% | 0.84% | 0.15% | 3.78% |
| Municipal Intermediate (MUB) | -0.11% | 0.27% | 0.91% | 1.70% | 0.39% | 4.63% |
| Municipal Long (MLN) | -0.28% | 0.00% | 0.76% | 1.50% | 0.34% | 3.26% |
| Municipal High Yield (HYD) | -0.06% | 0.14% | 1.02% | 2.23% | 0.22% | 3.29% |
Commodities
Commodities action was dominated by energy strength, with United States Gasoline (UGA) surging +4.78% and Brent Crude Oil (BNO) gaining +4.42%. This recovery in the energy complex offset significant weakness in Natural Gas (UNG), which plummeted -4.33% on mild weather outlooks. Precious metals were subdued, with Silver (SLV) falling -1.76% as the dollar strengthened.
| Commodity (Ticker) | 1-Day % Change | WTD | 1 Month | 3 Month | YTD | 1 Year |
|---|---|---|---|---|---|---|
| Broad Commodities (DJP) | 0.00% | 2.28% | 2.07% | 6.41% | 2.45% | 18.85% |
| Energy (DBE) | +3.27% | 1.81% | -2.57% | -3.35% | 1.40% | -2.75% |
| WTI Crude Oil (USO) | +4.06% | 2.29% | 0.07% | -4.07% | 2.00% | -8.75% |
| Brent Crude Oil (BNO) | +4.42% | 3.61% | 1.49% | -2.66% | 3.35% | -4.97% |
| Natural Gas (UNG) | -4.33% | -6.55% | -25.22% | -13.97% | -8.08% | -34.13% |
| Gasoline (UGA) | +4.78% | 4.95% | -0.82% | 0.74% | 4.15% | 1.87% |
| Precious Metals (DBP) | +0.10% | 4.13% | 12.51% | 19.07% | 5.19% | 79.14% |
| Gold (GLD) | +0.55% | 3.32% | 6.76% | 10.53% | 3.83% | 67.37% |
| Silver (SLV) | -1.76% | 6.02% | 32.25% | 56.44% | 8.21% | 154.42% |
| Industrial Metals (DBB) | -0.68% | 1.96% | 7.28% | 14.69% | 2.27% | 29.41% |
| Agriculture (DBA) | +0.39% | 1.76% | 2.06% | 1.14% | 1.92% | 2.21% |
Cryptocurrency
The cryptocurrency market saw a moderate pullback in majors like Bitcoin (IBIT) (-0.04%) and Ethereum (ETHA) (-0.97%), yet Solana (SOLZ) continued to show relative strength, gaining +1.37%. In the altcoin space, XRP experienced a sharp -2.34% decline, making it the worst performer of the day within the major assets.
| Asset (Ticker) | 1-Day % Change | WTD | 1 Month | 3 Month | YTD | 1 Year |
|---|---|---|---|---|---|---|
| XRP (XRP) | -2.34% | 7.21% | 1.71% | N/A | 15.98% | N/A |
| Ethereum (ETHA) | -0.97% | -0.55% | -1.14% | -31.37% | 4.55% | -5.60% |
| Multi-Coin (NCIQ) | -0.40% | 1.60% | -0.05% | -28.18% | 5.03% | N/A |
| Bitcoin (IBIT) | -0.04% | 1.14% | 0.00% | -26.46% | 3.77% | -3.41% |
| Solana (SOLZ) | +1.37% | 4.84% | 2.37% | -41.35% | 10.60% | N/A |
What to Watch Today
Today’s focus is squarely on the December Employment Situation report (Nonfarm Payrolls), the first major labor market data point of 2026. After a turbulent 2025 marked by government shutdown distortions and a cooling labor market, investors are looking for confirmation of a “soft landing.” Current consensus estimates anticipate a modest gain of approximately 66,000 to 70,000 jobs. A result significantly above this range could reignite inflation fears and put upward pressure on yields, while a miss would likely reinforce the case for the Federal Reserve to maintain its cutting cycle. Additionally, market participants are monitoring potential Supreme Court rulings regarding administration tariff policies, which could have sweeping implications for global trade and retail sectors.
For a deeper dive into the data, access today’s full Daily ETF Data Pack.
This material is for informational purposes only and should not be considered investment advice. All investments, including ETFs, involve risk, including the possible loss of principal. Investors should consider their investment objectives, risks, charges, and expenses carefully before investing.
This analysis was developed by the team at ETF Action. We leverage advanced AI tools to assist in the drafting and refinement of our content, based on our expert prompts, direction, and final review.
