Wall Street's strong start to the year slows
[January 08, 2026] By
STAN CHOE
NEW YORK (AP) — Wall Street’s strong start to the year slowed on
Wednesday.
The S&P 500 slipped 0.3% from its latest all-time high for its first
loss in four days. The Dow Jones Industrial Average dropped 466 points,
or 0.9%, from its own record set the day before, while the Nasdaq
composite added 0.2%.
Some of the market’s sharpest drops hit industries that President Donald
Trump targeted with criticism on his social media network. Homebuilders
fell sharply, for example, after Trump suggested moves to prevent large
institutional investors from buying single-family homes, in hopes of
making it more affordable for people to buy houses.
The potential removal from the market of some buyers for homes sent D.R.
Horton down 3.6% and PulteGroup 3.2% lower. Blackstone, a large
investment company, briefly fell more than 9%, before paring its loss to
5.6%.
Moves across the rest of the U.S. stock market were more modest,
including for Warner Bros. Discovery after it again rejected a buyout
bid from Paramount and told its shareholders to stick with a rival offer
from Netflix.
Warner Bros. Discovery rose 0.4%, while Paramount Skydance fell 1% and
Netflix added 0.1%.
All told, the S&P 500 fell 23.89 points to 6,920.93. The Dow Jones
Industrial Average dropped 466.00 to 48,996.08, and the Nasdaq composite
rose 37.10 to 23,584.27.
In the oil market, crude prices fell after Trump said that Venezuela
would provide 30 million to 50 million barrels of oil to the United
States. A barrel of benchmark U.S. crude dropped 2% to $55.99. Brent
crude, the international standard, fell a more modest 1.2% to settle at
$59.96 per barrel.
Any additional oil flowing from Venezuela would push down on crude
prices by increasing their supplies. Prices for oil have swung this week
following Trump’s weekend ouster of the president of Venezuela, which is
likely sitting on some of the largest deposits of petroleum in the
world.
Oil prices had already fallen back to where they were in 2021, before
Trump’s move against Venezuela, because of expectations for plentiful
supplies. To pull much more oil from Venezuela’s ground would likely
require big investments to improve aging infrastructure.
In the bond market, Treasury yields swung following several mixed
reports on the U.S. economy. One of the most impactful said that growth
for U.S. retailers, finance companies and other businesses in the
services sector accelerated by more last month than economists expected.
Not only that, the report from the Institute for Supply Management also
said that a measure of inflation eased to its lowest level since March.
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Options trader Joseph D'Arrigo works on the floor of the New York
Stock Exchange, Wednesday, Jan. 7, 2026. (AP Photo/Richard Drew)
 To be sure, company executives are
still saying they’re feeling pressures from inflation and an
uncertain economy. “In general, business is flat,” one business in
the agriculture, forestry, fishing and hunting industry told the
ISM. “Value brands are still experiencing higher demand. But premium
brands struggle to maintain market share.”
But any improvements will nevertheless sound good
to officials at the Federal Reserve, who are trying to shore up the
job market while pushing down on inflation, which has stubbornly
remained above the Fed’s 2% target.
Separate reports Thursday on the job market offered a mixed view.
One said that employers cut back on the number of job openings they
were advertising, while a second suggested that employers outside of
the government added 41,000 more jobs last month than they cut.
A much more comprehensive look at the U.S. job market will arrive on
Friday from the U.S. Labor Department.
The yield on the 10-year Treasury fell to 4.14% from 4.18% late
Tuesday following the economic reports. But the two-year yield,
which more closely tracks expectations for what the Fed will do, was
steadier. It held at 3.47%, where it was late Tuesday.
The hope on Wall Street is that the economy remains solid enough to
avoid a recession but not so strong that it keeps the Fed from
cutting interest rates. The Fed cut its main interest rate three
times last year to shore up the slowing job market, but it’s
indicated fewer cuts may be ahead because inflation remains high.
Traders are betting on a less than 12% chance that the Fed will cut
interest rates at its next meeting later this month. That’s down
slightly from the day before, according to data from CME Group.
In stock markets abroad, indexes were mixed among some sharp moves
across Europe and Asia.
Indexes dropped 0.7% in London, 0.9% in Hong Kong and 1.1% in Tokyo,
while rising 0.6% in Seoul.
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AP Business Writers Yuri Kageyama and Matt Ott contributed.
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