What’s Next for Bulls After a Strong Year? 02/01/2026

HOT stories for today

Market wrap:

• U.S. stocks edged lower Wednesday, extending a mild late-year pullback even as major indexes capped a strong 2025. The S&P 500 fell 0.74% to 6,845.50, the Nasdaq Composite slid 0.76% to 23,241.99, and the Dow Jones Industrial Average dropped 303.77 points, or 0.63%, to 48,063.29. The declines marked a fourth straight session of losses, though the moves were modest. The S&P 500 finished the year up 16.39%, its third consecutive double-digit gain. The Nasdaq jumped 20.36%, fueled by enthusiasm around artificial intelligence, while the Dow rose 12.97%, trailing due to its lighter tech exposure.
• The gains cap a sharp recovery from April’s tariff-driven selloff, when the S&P 500 slid nearly 19% from its February high and briefly dipped below 5,000. Still, the late-December weakness has raised some concern, as stocks failed to benefit from the typically supportive “Santa Claus” rally. Elsewhere, gold and silver fell after CME Group again raised precious metals margin requirements. South Korea’s Kospi touched a record high as Asian markets opened mixed in 2026, while bitcoin continued to struggle.

U.S. Economy Faces Growing Risks in 2026

• The U.S. economy is entering 2026 with growing strains, as stalled progress on inflation collides with signs of weakness in the labor market. Hiring has slowed sharply even as layoffs remain subdued, creating what economists describe as a “low-hire, low-fire” labor market. Mark Zandi of Moody’s Analytics and Claudia Sahm, a former Federal Reserve economist, say the dynamic is unsustainable and could eventually give way to a jump in unemployment. 
• The economy expanded at a 4.3% annualized pace in the third quarter, the strongest showing in two years. Still, the unemployment rate has edged higher, rising to 4.6% in November from 4% at the start of the year. As long as job creation remains weak and unemployment continues to climb, Zandi said, it is difficult to take comfort in the headline growth numbers. Adam Posen, president of the Peterson Institute for International Economics, sees inflation,  not stagnation, as the bigger threat in 2026. He points to potential pressure from Trump-era tariffs, fiscal stimulus, and the delayed impact of migrant-worker deportations, which could lift wages and prices in labor-intensive industries while weighing on growth. Those concerns stand in contrast to the Federal Reserve and many Wall Street economists, who expect stronger growth, steady employment and easing inflation next year. Independent economists, however, warn the economy remains fragile as it heads into 2026.

Stocks on the move:

• Nike (NKE): Shares of the sneaker maker climbed about 4% after board members Tim Cook and Robert Holmes Swan, along with Chief Executive Elliott Hill, boosted their holdings, according to Verity data. The buying comes as Nike closes out a challenging year.
• Corcept Therapeutics (CORT): The stock sank roughly 50% after the U.S. Food and Drug Administration declined to approve relacorilant for the treatment of hypercortisolism, citing insufficient evidence of effectiveness.
• Molina Healthcare (MOH): Shares rose 2.7%, extending the insurer’s winning streak to four sessions and lifting its weekly gain to 6.3%. The stock drew attention after investor Michael Burry highlighted the company in a Substack post.
• Nvidia (NVDA): The chipmaker added 0.7%, building on a strong year. Nvidia is up about 40% in 2025.
• Taiwan Semiconductor Manufacturing (TSM): Shares advanced about 2% after Reuters reported that Nvidia asked the company to increase production of its H200 chips, as orders from China are said to exceed 2 million units for delivery in 2026.

Watchlist: NVDA, AVGO, ORCL, NKE, TSM, TSLA

Key Economic Events Today:

EST time

09:45 am: USD Final Manufacturing PMI
02:30 pm: USD FOMC Member Paulson Speaks


Earnings

No major earnings today!





The TEFS Analyst team wishes you a successful day!