The first full trading week of 2026 delivered record highs, geopolitical shocks, and a noticeable shift in market leadership that has investors reconsidering their portfolios.
1. Stocks Hit Record Highs Despite Mixed Jobs Data
Friday’s close capped an impressive week for U.S. equities, with both the S&P 500 and Dow Jones hitting all-time highs. The S&P 500 gained 1% for the week, the Nasdaq climbed 1.3%, and the Dow advanced 1.2%.
December’s employment report delivered a mixed but ultimately reassuring message. While job gains of 50,000 fell short of the 73,000 expected, the unemployment rate surprised to the downside, dropping to 4.4% from the forecasted 4.5%. Markets interpreted this as evidence that the labor market is cooling without cracking, exactly the soft landing scenario the Federal Reserve has been aiming for.
2. The Venezuela Shock That Rocked Energy Markets
In what will surely be remembered as one of 2026’s most dramatic geopolitical moments, U.S. Delta Force operators captured Venezuelan President Nicolás Maduro and his wife during a predawn raid in Caracas on January 3rd. The operation, which caught Maduro sleeping in his home, immediately sent shockwaves through global energy markets.
Energy stocks surged on the news, with Chevron jumping 5% in a single session as investors anticipated the lifting of sanctions and potential access to Venezuela’s massive oil reserves. Oil prices climbed sharply, and the entire energy sector rallied as traders repositioned for a dramatically different supply landscape.
3. Beyond the Magnificent Seven: A Healthier Bull Market Emerges
Perhaps the week’s most encouraging development for market sustainability was the broadening of gains beyond big tech. As concerns about AI valuations prompted some caution, investors rotated into previously overlooked opportunities.
Small-cap stocks led the charge, with the Russell 2000 notching a 1.4% gain, while the equal-weighted S&P 500 rose 1.2%, both outpacing the market-cap-weighted index. Value stocks outperformed growth, and defense shares reached all-time highs on the back of geopolitical tensions and budget expectations.
4. TSMC Crushes Revenue Expectations on AI Chip Demand
Taiwan Semiconductor Manufacturing Company delivered a powerful signal about AI’s momentum on January 9th, reporting fourth-quarter 2025 revenue of NT$1.046 trillion (approximately $33.1 billion). The number beat analyst expectations of around NT$1.036 trillion and represented a robust 20.45% increase from the same quarter a year earlier.
As the primary chip manufacturer for AI giants like Nvidia and Apple, TSMC’s results offer a direct window into the health of AI infrastructure spending. The strong performance came despite normal seasonal softness in other segments like smartphones, underscoring just how powerful AI demand has become.
TSMC’s Taipei-listed shares gained over 44% in 2025, and this revenue beat reinforces the bullish thesis. But investors aren’t celebrating just yet as they wait for management’s guidance for 2026.
The Bottom Line
The first full trading week of 2026 reflected resilient risk appetite and a willingness to look past geopolitical developments in favour of solid fundamentals. The broadening of market leadership is particularly encouraging, suggesting this is not just another AI-driven melt-up.
Still, concerns about valuations, particularly in technology and artificial intelligence, have not disappeared. They have just been overshadowed temporarily by positive momentum and improving breadth.
The market has shown it can handle surprises, but 2026 is young, and there’s plenty of year left for things to get interesting.
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