Overseas, the first trading week of the year could shake the US sharemarket out of its winter holiday slumber as investors parse the rapid developments in Venezuela and monthly jobs data looms.
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Stocks slid in the final session of 2025, with the benchmark S&P 500 falling to a monthly loss for December. But the index still rose more than 16 per cent in 2025, its third straight year of double-digit percentage gains, while the Cboe Volatility index was just above its lows for the year.
Trading volumes were thin at the end of 2025, but the new year could get off to an eventful start.
After the weekend’s events, when US forces captured Venezuelan President Nicolás Maduro and US President Donald Trump said the country would be under temporary American control, investors said such developments in the oil-rich South American country raised concerns around geopolitical risks, and that any oil price volatility would ripple through assets.
Investors also await more drama with a US Supreme Court decision looming on Trump’s tariffs, along with his choice of a new chair for the Federal Reserve. The US corporate earnings season is also around the corner.
In the first session of 2026 on Friday, the S&P 500 posted a slim gain as semiconductor shares rallied.
Although the benchmark is near record highs, it is hovering around its late-October level, said Matthew Maley, chief market strategist at Miller Tabak.
“The market is looking for direction,” Maley said. “We break out of these ranges and that’s going to give people either a lot of confidence or a lot of concern, depending on which way it breaks.”
Jobseekers at a careers fair in California. The US unemployment rate sits at 4.6 per cent.Credit: Bloomberg
Jobs data due on Friday could provide a jolt either way. Concerns over weakness in the labour market prompted the Fed to lower interest rates at each of its last three meetings of 2025, as the US central bank juggled its goals of full employment and containing inflation.
Lower rates have supported equities, but the extent of further cuts in 2026 is unclear. Fed officials were divided over the path for monetary policy at the most recent meeting in December. Inflation remains above the Fed’s annual target of 2 per cent.
“Softening in the labour market has really given the Fed good cover to change their outlook about reducing rates,” said Eric Kuby, chief investment officer at North Star Investment Management in Chicago.
At the same time, investors are wary that an overly weak report could signal more economic concern than markets now anticipate.
With Reuters
