Equities End Mixed Ahead of Friday's Nonfarm Payrolls Report; Defense Stocks Rise

04:39 PM EST, 01/08/2026 (MT Newswires) -- US equity benchmarks closed mixed Thursday, with the Nasdaq Composite snapping a three-day advance, as investors evaluated fresh labor market data ahead of Friday's key jobs report.

The Nasdaq fell 0.4% to 23,480, while the Dow Jones Industrial Average rose 0.6% to 49,266.1. The S&P 500 finished near the flatline at 6,921.5. Barring technology and health care, all sectors were in the green, led by energy.

In economic news, job cut announcements in the US fell last month to the lowest since July 2024, while the annual tally hit the highest in five years, Challenger Gray & Christmas said.

"The year closed with the fewest announced layoff plans all year," Andy Challenger, the firm's chief revenue officer, said. "While December is typically slow, this coupled with higher hiring plans, is a positive sign after a year of high job cutting plans."

The Department of Labor reported that weekly applications for unemployment insurance rose less than expected, while continuing claims increased more than projected.

On Friday, the Bureau of Labor Statistics is expected to report that the US economy added 70,000 nonfarm jobs last month, compared with a 64,000 gain reported for November, according to a Bloomberg-compiled survey.

On Wednesday, ADP's (ADP) data showed that employment in the US private sector rose in December, though less than estimated as large companies pulled back on hiring.

Jefferies expects a 115,000 increase in December payrolls amid stability in labor market data since November. It forecasts the unemployment rate to drop by 0.3 percentage points to 4.3%.

US Treasury yields were higher, with the 10-year rate up 2.5 basis points at 4.18% and the two-year rate rising 2.1 basis points to 3.5%.

Traders also assessed the implications of President Donald Trump's proposal to boost the country's annual military budget by $500 billion for 2027.

Defense stocks rallied Thursday, with Kratos Defense & Security Solutions (KTOS) surging nearly 14% and Lockheed Martin (LMT) up 4.3%. Northrop Grumman (NOC) shares rose 2.4%, while General Dynamics (GD) gained 1.7%.

Trump's proposal appears unrealistic, Truist Securities said in a note. The push "may apply some upward pressure on stocks, but should not be viewed as realistic," the brokerage said.

Trump is seeking to restrict defense contractors' capital allocation, but Truist said the plan may face implementation challenges.

Risks from Trump's proposed ban on institutional home purchases are likely "manageable" for Blackstone (BX), though there's considerable uncertainty around the move for now, UBS Securities said in a note.

On Wednesday, Trump said he was "immediately taking steps to ban large institutional investors from buying more single-family homes" in a bid to make homeownership affordable.

Nvidia (NVDA) saw the second-steepest drop on the Dow, down 2.2%, with fellow mega-cap tech stocks Apple (AAPL) and Microsoft (MSFT) also registering declines.

Acuity Brands (AYI) shares sank nearly 13% after the lighting and building management solutions provider posted fiscal first-quarter earnings above market estimates, but left its full-year outlook unchanged.

West Texas Intermediate crude oil was last up 4.6% at $58.54 a barrel.

"Oil prices rose after two days of losses as investors weighed developments in Venezuela and progress on proposed US sanctions targeting countries trading with Russia," D.A. Davidson said in a note to clients.

Gold was up 0.5% at $4,486.80 per troy ounce, while silver declined 1.1% to $76.80 per ounce.

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