Market Divided: Energy Soars While Housing Stumbles in Mixed Trading Day

Stock markets delivered a fragmented performance today, with diverging fortunes across sectors creating a classic tale of winners and losers. The S&P 500 Index dipped -0.05%, the Dow Jones Industrials Index climbed +0.43%, while the Nasdaq 100 Index retreated -0.26%, reflecting the broader tension between different parts of the market.

The day’s most compelling narrative centered on a stark sectoral split. Energy producers staged a remarkable rally, surging higher as WTI crude oil gained more than 1% following President Trump’s announcement of an oil blockade on Venezuelan tanker traffic. Devon Energy jumped more than 2%, while APA Corp, ConocoPhillips, Halliburton, Occidental Petroleum, Diamondback Energy, and Chevron all moved higher by over 1%.

Riding this wave of geopolitical uncertainty, mining stocks and precious metals also climbed higher on safe-haven demand. Silver reached a new all-time peak, with lithium producers like Albemarle surging more than 4% as the market priced in continued demand growth for the critical battery material.

On the flip side, homebuilders got crushed. Lennar’s -3% plunge led the sector lower, triggered by weak Q4 earnings forecasts and disappointing guidance for Q1 new orders at 18,000-19,000 units, trailing consensus expectations of 20,297. DR Horton, PulteGroup, and Toll Brothers all declined over 1%, signaling broader weakness in residential construction sentiment.

Fixed Income Under Pressure

Treasury yields climbed higher today, with the 10-year T-note yield rising 2 basis points to 4.17%, pressured by a contagion effect from Japan’s bond market. Tokyo’s 10-year yield surged to an 18-year high of 1.98% on concerns that the Japanese government is considering a record 120 trillion yen ($775 billion) fiscal budget for 2026. This unexpected move rippled across global fixed income markets.

However, dovish remarks from Fed Governor Christopher Waller provided some relief. He emphasized that the labor market remains “pretty soft” with near-zero job growth, inflation is anchored around 2%, and interest rates still sit 50-100 basis points above neutral levels. His comments suggesting steady rate cuts without urgency supported both stocks and bonds during afternoon trading.

Corporate Actions Drive Individual Stock Drama

Beyond sector movements, individual stocks swung dramatically on earnings and analyst actions. Jabil Inc catapulted higher by more than 6%, reporting Q1 revenue of $8.31 billion—beating consensus of $8.04 billion—and raising its 2026 revenue guidance to $32.4 billion from $31.3 billion.

Optical technology stocks benefited from bullish analyst pivots. Morgan Stanley elevated Lumentum Holdings’ price target to $304 from $190, lifting the stock more than 4%. Coherent Corp similarly jumped more than 4% after receiving a $180 target from the same analyst, up from $150.

Netflix gained more than 2% after Warner Bros. Discovery signaled plans to reject Paramount Skydance’s takeover bid over financing concerns, removing a key competitive threat. However, Paramount Skydance itself plummeted more than 4% as the deal faced rejection. Bally’s Corp suffered an even worse fate, cratering more than 8% after Barclays downgraded the stock to underweight with an $11 target.

Negative catalysts also emerged elsewhere. Progressive Corp slid more than 3% following November net premiums written declining 12% month-over-month. Oracle fell more than 3% after reports that Blue Owl Capital won’t back the company’s $10 billion data center deal.

Looking Ahead

The coming week’s economic calendar looms large. Thursday brings initial unemployment claims expected to fall 11,000 to 225,000, while November CPI data is anticipated at +3.1% year-over-year, with core CPI at +3.0% year-over-year. Friday will feature November existing home sales data expected up 1.2% month-over-month to 4.15 million, alongside the University of Michigan consumer sentiment revision.

Futures markets currently price a 24% probability of a 25-basis-point Fed rate cut at the January 27-28 FOMC meeting, reflecting lingering uncertainty about monetary policy direction. Globally, markets painted mixed results: the Euro Stoxx 50 finished lower by -0.21%, China’s Shanghai Composite closed higher by +1.19%, and Japan’s Nikkei 225 recovered from recent weakness to close higher by +0.26%.