S&P500: US Indices Dip Premarket but Defense Stocks Soar on Trump Budget Proposal

• Defense stocks rallied sharply with Kratos Defense up 11.20%, Northrop Grumman gaining 8.84%, and Lockheed Martin advancing 7.98% on Trump's proposed $1.5 trillion 'Dream Military' budget for 2027.
• S&P 500 futures fell 0.25% to 6945.50, with technical analysis showing potential support at the uptrend line around 6907 and the 50-day moving average at 6885.
• Gold miners faced pressure as traders brace for approximately $6.8 billion in futures contract liquidation due to annual commodity index rebalancing between January 9-15, with Newmont Corporation down 2.39%.

Market Summary: Defense Stocks Rally as Broader Indices Pull Back

Key Market Movements

U.S. stock index futures declined Thursday morning as investors took profits following record highs in the S&P 500 and Dow Jones. At 12:14 GMT, Dow futures fell 195 points (-0.40%), S&P 500 futures dropped 17.75 points (-0.25%), and Nasdaq-100 futures declined 89 points (-0.34%). Position-squaring ahead of Friday's critical NFP jobs report contributed to selling pressure.

Defense Sector Surge

Defense stocks bucked the downward trend, surging on President Trump's proposal for a $1.5 trillion military budget in 2027 for his "Dream Military" plan. Major gainers in premarket trading included:

• Kratos Defense: +11.20%
• Northrop Grumman: +8.84%
• Lockheed Martin: +7.98%
• RTX: +5.33%

This represents a sharp reversal from Wednesday's defense sector weakness.

Commodity-Driven Sector Movements

Energy: Oil stocks rebounded after Wednesday's steep decline triggered by Trump's comments about Venezuela delivering up to 50 million barrels of oil to the U.S. Exxon Mobil (+0.33%), Chevron (+0.66%), and Halliburton (+1.00%) posted modest gains.

Gold Mining: Newmont Corporation dropped 2.39% following gold's plunge and expectations of further pressure from $6.8 billion in futures contract liquidation due to commodity index rebalancing between January 9-15.

Technical Outlook

The S&P 500 hit a high of 7,006.75 before pulling back. Key support levels include the uptrend line at 6,907.50 and the 50-day moving average at 6,885. A convincing break below could trigger further downside toward 6,866.75.