Stock Market Today, Jan. 8: Defense Stocks Rally and Tech Retreats

S&P 500 (SNPINDEX:^GSPC) finished almost flat at 6,921.46, the Nasdaq Composite (NASDAQINDEX:^IXIC) declined 0.44% to 23,480.02 on tech weakness, while the Dow Jones Industrial Average (DJINDEX: ^DJI) gained 0.55% to 49,266.11 as defense and staples outperformed.

Market movers

Northrop Grumman (NYSE:NOC) advanced on Trump’s $1.5 trillion defense-budget push and a new $94 million U.S. Navy contract. Lockheed Martin (NYSE:LMT) and RTX (NYSE:RTX) also posted gains. Profit-taking weighed on AI-linked chip and software names including Micron (NASDAQ:MU) and Zscaler (NASDAQ:ZS).

What this means for investors

Defense stocks rallied today after President Trump called for a $1.5 trillion defense budget in 2027. Last night's social media post said the military spend next year should increase from $1 trillion, boosting investor interest in major contractors. This bolstered the Dow relative to other indexes.

The Nasdaq dropped for the first time this week as a cautious mood weighed on tech stocks. Goldman Sachs (NYSE:GS) warned some of the tailwinds that drove huge growth in recent years are starting to fade. Analysts predict lower returns in 2026.

Alphabet (NASDAQ:GOOGL) overtook Apple (NASDAQ:AAPL) in market cap, making it the second-most-valuable company in the world. Nvidia (NASDAQ:NVDA) and Meta (NASDAQ:META) both flagged. High fliers Micron and Sandisk (NASDAQ:SNDK) also pulled back as soaring interest in AI memory chip demand stalled. That said, in the past five days Sandisk and Micron have both gained around 40% and 15% respectively.

Emma Newbery has positions in Apple, Nvidia, and Zscaler. The Motley Fool has positions in and recommends Alphabet, Apple, Goldman Sachs Group, Meta Platforms, Nvidia, RTX, and Zscaler. The Motley Fool recommends Lockheed Martin. The Motley Fool has a disclosure policy.