The first complete trading week of the US stock market in 2026: Non-farm payrolls hit hard, with investors closely watching the job market.

Last Friday, which was the penultimate trading day of the "Santa Claus rally" period, the US stock market closed with the Dow Jones Industrial Average leading the gains, driven by blue-chip stocks. The S&P 500 index also rose, while the Nasdaq index dropped slightly. Looking ahead to the coming week, the first full trading week of 2026 will see a comprehensive release of economic data. The US non-farm payroll report for December, to be released on Friday, is expected to show a slowdown in hiring activity for the last month of 2025. Economists predict an increase of 55,000 in non-farm payrolls for December, lower than the November increase of 64,000; in terms of unemployment rate, which rose to a four-year high of 4.6% in November, it is expected to drop by 0.1 percentage points in December. Additionally, the economic calendar for the week includes the ADP monthly private sector employment report, Challenger, Gray & Christmas' monthly layoff data, and the weekly initial jobless claims report. As the new year begins, the labor market will be a key focus for the markets. All of these employment data will be closely watched to assess the likelihood of a rate cut by the Federal Reserve at their meeting later this month. However, traders currently expect an 85% probability that the Fed will maintain the federal funds rate in the 3.5%-3.75% range. Investors will also closely monitor whether US President Trump will announce a nominee to replace current Federal Reserve Chairman Powell. Powell's term as chairman is set to expire in May. Trump said at the end of last month that he expects to announce a successor in early January. Service sector activity data and consumer confidence data will close out the economic data schedule for the coming week. Corporate earnings reports will remain light, with Constellation Brands (STZ.US), Albertsons Companies, Inc. Class A (ACI.US), Jefferies Financial Group Inc. (JEF.US), and Applied Digital (APLD.US) being the most anticipated companies to report quarterly earnings in the coming week. Major banks are expected to kick off a new round of earnings season in less than two weeks. "The continued spirit of creative destruction" Despiteor perhaps because ofthe ups and downs in the market this year, 2025 remained a very good year for investors. The S&P 500 index rose more than 16% for the year, while the Nasdaq Composite Index led the major indices with a gain of over 20%. Notably, this performance was achieved against the backdrop of a sharp decline in April that nearly dragged the market into bear territory in just a few days. Adam Turnquist, Chief Technical Strategist at LPL Financial, said, "The US economy has shown exceptional resilience, overcoming multiple adverse factors such as high inflation, slowing labor market, fewer rate cuts than initially expected, and a significant increase in effective tariff rates." NVIDIA Corporation (NVDA.US), a leading global chip manufacturer, saw its stock price rise by over 30% in 2025, while another member of the "Fab Seven," Alphabet Inc. Class C (GOOGL.US), outperformed the tech giant group with a gain of over 60%. It is worth noting that these two stocks were the only members of the "Fab Seven" last year to outperform the S&P 500 index. Peter Oppenheimer, strategist at Goldman Sachs Group, Inc., pointed out in the firm's 2026 global outlook report that despite high valuation levels and significant stock price gains, the growth of the technology industry is not just a "sole AI story" without other supporting factors. Instead, he said, the industry has consistently performed strongly since the financial crisis, supported by outstanding profit growth. Oppenheimer also noted that current valuations are not as extreme as in previous bubble periods (such as the dot-com bubble peak in the early 21st century), and market speculation is far less irrational than back then. He said, "The rise of the technology industry in scale and influence, particularly in the US stock market, is not due to irrational speculation about the future, but rather to exceptionally strong fundamental growth." Overall, according to data from Bank of America Corp, Wall Street strategists on average expect the S&P 500 index to rise by about 10% in the next year. However, the question facing investors in 2026 is whether the rally driven by technology and AI themes over the past year can continueespecially at the level of individual stocks, as investors have begun to move away from the dominant "Fab Seven" companies. Nicole Inui, stock strategist at HSBC, wrote in the bank's 2026 outlook that the stock market performance in 2025 "was a highly concentrated rally, not a broad-based rally." She pointed out that the equal-weighted S&P 500 index has underperformed the market-cap weighted S&P 500 index for three consecutive years. Following Trump's announcement of "Liberation Day" tariffs, followed by a retreat, the tech sector contributed about 90% of the market's rebound. However, this does not mean that the strong performance of these companies is not sustainable. In a report to clients, Eric Teal, Chief Investment Officer at Comerica Wealth Management, likened the current market to "a period of sustained, creative destruction," a term coined by Austrian economist Joseph Schumpeter. Teal wrote, "Capitalist economies are often swept up in a 'period of sustained, creative destruction'a period of innovation. However, this progress is a natural process of continuous industrial evolution, which, while bringing about radical economic change, also brings tremendous benefits to society and businesses." Against the backdrop of AI trading being highly popular and starting to face real-world obstacles, how this "period of sustained, creative destruction" will sweep through the market in 2026 may become the most closely watched narrative for investors.