The “Freedom Trade” hype has finally stalled after a relentless start to the year.
Traders are beginning to realize that geopolitical turmoil could deepen, as the Venezuela operation may have opened the door for further—and potentially more tumultuous—US military engagements. This anxiety is compounded by President Trump’s recent pledge to increase military spending by $500B for 2026.
In an effort to calm tensions, US Secretary of State Rubio has finally accepted a meeting with Greenland, coming at a time when NATO faces its most significant stability challenges in 80 years.
Markets will undoubtedly remain on edge regarding these diplomatic shifts going forward.
On the economic front, the labor picture is brightening. US layoffs are looking much less concerning than they did through October and November, confirming the strength seen in the ADP data and Jobless Claims reports released earlier this week.
However, looking at the market picture for today’s concluding session, investors are showing signs of caution.
We may see further rotation into defensive sectors as tech layoffs—driven by the deepening implementation of AI—continue to dominate the data. These flows also extend the narrative of overextended valuations that arose throughout the final quarter of 2025.
As we begin the New Year, reading between the lines of institutional and big player positioning is essential.
The Dow appears to be a heavy favorite for smart money; given how little chatter there is about this trade compared to the crowded consensus in Metals, I wouldn’t be surprised to see it outperform.
Tomorrow brings a critical test: a finally up-to-date NFP report. While long-awaited since the US Shutdown disrupted timely releases, traders should remain wary—data gaps from the October-November stretch could still result in statistical biases and accuracy issues.
Ahead of tomorrow’s US jobs report, let’s dive into our daily intra-session charts and NFP trading levels for the major US Indexes: Dow Jones, Nasdaq, and S&P 500.
