Traders spent Thursday picking through mixed signals: the Dow climbed, the Nasdaq cooled, and a clutch of defense contractors suddenly looked a lot more interesting. The moves felt less like a tectonic shift than a market catching its breath ahead of two big events — Friday’s December jobs report and a potential Supreme Court decision on the legality of President Trump’s tariffs.
The headline numbers were familiar but telling. The Dow rose roughly 0.5–0.6% after investors rotated away from richly priced megacaps; the Nasdaq, weighed by Nvidia and other tech names, slipped about 0.4%. The S&P 500 barely budged. Under the surface, however, there was a clear theme: political pronouncements reshaping sector fortunes overnight.
Politics as a market mover
President Trump’s tone on defense — a mix of threat and promise over two days — sent war-room winners higher. After telling defense companies he would block buybacks and dividends unless they accelerated weapons production, he followed up by saying the military budget should be roughly $1.5 trillion for 2027. That dual posture rattled the sector one day and revived it the next.
Shares of Lockheed Martin, Northrop Grumman and General Dynamics popped, some jumping as much as 7–8% in early trading before settling back. The pattern was naked: policy moves can yank cash flows and capital-allocation plans in an instant, and investors are quick to reset valuations when a large, politically driven spending boost appears possible.
Meanwhile, energy names found a bid as developments around Venezuela’s oil assets continued to unfold. Conversations between U.S. officials and major oil companies about legal and financial guarantees to invest in Venezuelan production kept crude and oil-service stocks on investors’ radar.
Jobs, tariffs — and the restocking question
Markets are also braced for Friday’s jobs print. Economists expect modest growth in nonfarm payrolls and a slight dip in the unemployment rate; the real market question is what the data imply for rate policy and the timing of any cuts.
The other x-factor is the Supreme Court. A ruling on the administration’s use of emergency powers to impose sweeping tariffs could change the calculus for companies that have been cautious about inventory and supply chains. As Wells Fargo’s Ohsung Kwon put it on CNBC, firms may have been in a “wait-and-see” mode, delaying restocking until they knew whether tariffs would stick. A clear decision either way could kick-start manufacturing orders — or produce relief for import-heavy businesses.
That legal shadow also helps explain some of the rotation out of tech: uncertainty about trade policy reroutes supply-chain bets, and higher capital costs for certain imports can squeeze margins on hardware and data-center builds.
Nvidia, China and the chip tug-of-war
Nvidia’s stock cooled Thursday amid profit-taking and some geopolitical noise, but the company’s China story remains pivotal. Reports that Beijing may greenlight some H200 AI chip imports — coupled with Nvidia’s insistence on full up-front payment from Chinese buyers — underscore how complex the chip trade has become. If significant H200 shipments to Chinese data centers occur, it could provide a meaningful lift to Nvidia earnings; if not, many models are conservative about that upside.
The broader AI push is one reason markets and analysts are fretting about raw materials. S&P Global’s work (and other industry notes) point to surging copper demand as data centers, AI racks and defense spending all compete for the same metals. It’s a reminder that a technological sprint has physical supply limits.
If you want a sense of how AI is being embedded into products and services — and why the infrastructure story matters — the evolving integration of advanced models into everyday apps is worth watching (for example, how firms are tying models into search and productivity tools in ways that change compute and data-center needs). See how AI is being woven into core services in Gemini Deep Research and why companies are even thinking about far-out data-center concepts like Project Suncatcher.
Corporate headlines: Intel, Apple and restructurings
Corporate-specific news added texture. Intel’s profile got a positive mention after a meeting with the U.S. president and a government stake that’s reshaped investor perception; Apple’s credit-card business move to JPMorgan — a multiyear transition — was another reminder that big consumer tech companies keep making quietly important financial shifts. General Motors, meanwhile, flagged heavy fourth-quarter charges tied to its EV pullback, which moved its shares in after-hours trading.
What markets are pricing
Bond yields edged higher and gold remained sensitive to positioning ahead of the jobs number. Traders appear to be pricing a world in which the Fed watches both labor-market resilience and geopolitical policy — not least trade — before altering policy. That ambiguity is why some parts of the market are sitting tight: rotate where you feel you have a clearer line of sight, sit on cash where you don’t.
There’s a human element to these moves. A procurement officer in the Midwest might delay a big component purchase until she knows whether tariffs stand; a portfolio manager in New York might reweight defense names if a multi-year spending bump looks credible. Those are discrete decisions, but multiplied across thousands of firms they help determine daily market flows.
Markets rarely move in straight lines. Thursday was a session where politics, legal risk and the slow grind of economic data combined to produce a messy, interesting tape. Expect more of the same: headlines that matter, numbers that clarify or confuse, and investors trying to read the tea leaves between them.