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Geoff Bysshe, the President of MarketGauge contributed to this article. The stock market's biggest headwind in 2026 may not be what you investors are thinking.

U.S. stocks traded higher toward the end of trading, with the Dow Jones index gaining more than 250 points on Monday.
Since rates peaked at 5.50% in 2023, the Fed has cut rates six times, lowering them by a cumulative 1.75% to approximately 3.75%. Those cuts have helped pave the way for a smoother ride, providing a meaningful tailwind to equity markets.
US stocks rose on Monday, with the Nasdaq 100 Index and the S&P 500 Index gaining, as demand for tech shares remained strong despite worries over geopolitical risk. Oil prices and gold rose, with Brent crude and gold prices increasing as oil traders weighed the fallout from the developments in Caracas and investors sought safe-haven assets.

Entering 2026, I see heightened volatility and correction risk driven by midterm election dynamics, stretched valuations, and major policy events. Valuations remain historically elevated, with the CAPE ratio near 39.42, suggesting limited upside and increased downside risk reminiscent of prior market peaks.

AeroVironment leads gains for defense contractors, two break out amid Venezuela operation, rising tensions with Israel, Iran.

After months of back-and-forth menaces, the US launched some proper attacks against Venezuela and captured its President, Nicolas Maduro. Debates are high in the impact on markets.

In September 1987, Donald Trump paid $94,801 for full-page advertisements in the New York Times, the Washington Post and the Boston Globe. He was 41 years old, not yet a politician.

I currently exclude international equities from my 10-ETF tactical mix due to high correlation with U.S. stocks and a strong dollar. Recent international outperformance is attributed to U.S. dollar weakness, not superior foreign economic fundamentals.

Defense-related stocks and banking giants Goldman Sachs and JPMorgan all rose.

President Trump's intervention in Venezuela carries risks, but market fundamentals remain solid.

The U.S.'s capture of Venezuela President Nicolás Maduro on Saturday, Jan. 3, triggered a massive rally in drone stocks as markets opened on Monday.

Market Catalysts anchor Julie Hyman breaks down the latest market moves for January 5, 2026. Oil stocks rallied following President Trump's capture of Venezuelan President Nicolás Maduro by US military forces.

Minneapolis Fed President Neel Kashkari told CNBC on Monday that the labor market is "clearly" cooling, with unemployment around 4.6% and businesses slowing their hiring. Kashkari said while inflation is still too high, policy is likely near neutral and the bigger risk right now may be unemployment rising further.
The artificial intelligence boom that powered Wall Street's technology stocks is "now in the early stages of a bubble," hedge fund manager Ray Dalio warned in a post on social media platform X on Monday.

Long-term expectations for the Global Market Index (GMI) remained steady at a 7%-plus pace for the annualized total return outlook, based on data analytics through December. The forecast has been relatively stable at this level recently, rising fractionally over last month's estimate.

@CharlesSchwab's Collin Martin explains moves in the bond market following headlines surrounding Venezuela and a contractionary ISM manufacturing print. He calls the ISM number "disappointing," but calls Wednesday's upcoming ISM services number more important.

Investors still need to be selective when playing the choppy software sector, but analysts see compelling opportunity in some high-profile stocks and under-the-radar plays.

The Institute for Supply Management said that its purchasing managers index of manufacturing activity fell to 47.9 in the month, compared with 48.2 in November.

U.S. stocks delivered exceptional returns in the 2020s but are now historically expensive, raising concerns of a potential market correction. Bonds have underperformed this decade, with 2022 marking the worst annual loss ever and recent years showing real, inflation-adjusted losses.