S&P 500 and Dow Drop Could Signal End of 2026 Year Start Rally
Tech stocks have slowed except for Intel's massive increase this week, and the oil sector is set for a shakeup as the US oversees Venezuela.
Quick overview
- The Dow Jones and S&P 500 indices fell, suggesting the early 2026 rally may be over, while the Nasdaq Composite saw a slight gain.
- The capture of Venezuelan President Nicolas Maduro has influenced the stock market, with rising global defense and oil stocks.
- An agreement for the U.S. to receive 50 million barrels of crude oil from Venezuela could lead to significant growth for energy companies.
- Intel's stock surged over 10% following the announcement of new processors, highlighting the potential for a tech market shakeup.
The Dow Jones and S&P 500 stock market indices fell on Wednesday, indicating that the 2026 rally that started the year off could be finished.
The Nasdaq Composite gained slightly on Wednesday by the end of day, adding 0.16%, but tech stocks are not performing as strongly as they did last week. Both the smaller tech rally and the wider stock market rally appear to be over at this point, although energy stocks could still surprise this week.
The capture of Venezuelan President Nicolas Maduro has impacted the stock market all week long and should continue to do so, with global defense and oil stocks rising early on. While many of the gains are still intact, the swift upward movement has slowed significantly. However, President Donald Trump and his administration are meeting with energy companies this week, and their talks could spur another energy sector rally.
Oil Market Changes
This week, Trump spoke on an agreement reached with Venezuela to have 50 million barrels of crude oil sent to the United States. This trade deal is part of a larger agreement for the United States to control oil output for Venezuela moving forward. The agreement is currently established with no end date in site, arranged which could mean incredible growth for energy companies in the region.
Market volatility has been low but could escalate as the geopolitical situation intensifies. Statements from leaders in Colombia, China, and Russia have indicated that other countries are not happy with Trump’s actions in Venezuela and that they may be ready to take action. In the case of Colombia, the leaders there expect further conflict in the region and are prepared to defend themselves.
Tech Market Shakeup
The next big market move could happen on the tech side, particularly with AI stocks. On Thursday, numerous U.S. senators will be speaking about AI funding and the legal framework for that market. This is a rapidly changing sector that is affecting most areas of technology, and its rapid growth has alarmed the public and the government enough that new laws may need to be established to limit the reach and function of AI.
Intel (INTC) stock climbed more than 10% on Wednesday after news from CES revealed that the company has new Core Ultra Series 3 processors. These chips are made with the 18A manufacturing process and are set to be the next big step forward for the company. After a banner year in 2025 with 84% growth, Intel is one of the key tech stocks to watch.
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