Morning wrap (09.01.2026)

Wall Street saw a clear rotation out of last year’s tech winners, with money moving into energy, consumer goods, and small caps. Positioning looks broader and less concentrated than it has been in recent months. This morning, U.S. index futures are slightly lower, while European benchmarks are mostly flat.

The Nasdaq 100 slipped about 0.6%, ending a short three-day rebound. Weakness in Nvidia and Apple weighed on sentiment and may signal fading short-term momentum in mega-cap leadership. The Dow Jones Industrial Average outperformed, rising more than 0.5% as investors leaned into more defensive and value-linked parts of the market.

Small caps remained in focus, with the Russell 2000 printing a fresh high and gaining more than 1% (up 4.5% YTD), reflecting a shift toward domestically driven growth exposure.

Today’s two key risk events: U.S. Non-Farm Payrolls at 12:30 PMG and a potential Supreme Court decision related to Trump’s tariffs.Additional U.S. data later: University of Michigan preliminary consumer sentiment and inflation expectations at 2 PM GMT.

Taiwan Semiconductor reported sales with very solid YTD result at NT$3.81T (+31.6% Y/Y) and Dec Monthly Sales at NT$335.0B. Yesterday, defense stocks strengthened after Trump hinted at higher military spending, showing how quickly policy headlines can reprice government-linked sectors.

The bond market rally paused. U.S. Treasuries weakened and the 10-year yield rose to around 4.18%, suggesting markets are not aggressively pricing a sharp slowdown. Labor-market signals helped sentiment: corporate layoff announcements fell to a 17-month low, while weekly jobless claims rose less than expected, easing fears of a sudden economic deterioration.

In Asia, the MSCI Asia Pacific Index traded in a tight range ahead of U.S. macro catalysts, with risk appetite restrained. Japan stood out positively, supported by a weaker yen and strong Fast Retailing results, lifting the broader domestic market.

Rio Tinto shares declined amid continued discussions around a potential Glencore-related deal, a development that could reshape the global industrial metals landscape if it advances.

Treasuries softened, but mortgage-backed securities gained after Trump floated a $200B mortgage bond purchase plan, a headline markets viewed as supportive for mortgage conditions and, indirectly, equities.

The U.S. dollar remains on track for its strongest week since November, a move that can tighten global financial conditions and typically pressures commodities and risk assets.

Oil continued to grind higher as markets monitored developments tied to Venezuela and Iran, keeping a geopolitical premium in place and complicating the inflation outlook.

Gold and silver slipped on firmer yields and a stronger dollar, as defensive demand cooled following resilient U.S. data.

Russia reportedly struck Ukraine with hundreds of drones and used the Oreshnik intermediate-range ballistic missile (IBRM), targeting critical energy infrastructure in the revenge of Ukrainian attack on Putin's residence. Unconfirmed reports suggest a gas storage facility in western Ukraine may have been hit, potentially affecting up to 17 Bcf of natural gas, around half of national reserves.

Trump said the U.S. could intervene militarily in Iran if protesters are killed. Overnight, demonstrations reportedly intensified and spread, alongside reports of internet and mobile network blackouts