Tech-Led Selloff Spurs Volatility, Rotation Toward Defensives

Last week was defined by volatility as stocks whipsawed between deep, tech-led losses and a late-week rally. Wall Street experienced a mid-week selloff as investors moved away from tech and AI shares. Investors were also concerned about a drop in job openings and a rise in jobless claims. A surge last Friday pared losses and even helped push the Dow past the 50,000 mark. U.S. bond markets saw prices edge slightly higher, pulling yields lower. The market sectors experienced extreme differences, with Consumer Staples, Industrials and Energy surging, while Consumer Discretionary, Information Technology, and Communication Services closed sharply in the red.

Job Openings Fall, Hiring Rises in December

According to the latest Job Openings and Labor Turnover Summary, the number of job openings declined 386,000 to 6.5 million in December and was down 966,000 from the end of 2024. The number of hires, at 5.3 million, rose by 172,000. Total separations include quits (voluntary separations), layoffs and discharges, and other separations. In December, the number of total separations increased by 107,000 to 5.3 million. In November, the number of job openings was revised down by 218,000 to 6.9 million, the number of hires was revised up by 6,000 to 5.1 million, and the number of total separations was revised up by 64,000 to 5.1 million. Within separations, the number of quits was revised up by 32,000 to 3.2 million, the number of layoffs and discharges was revised up by 14,000 to 1.7 million, and the number of other separations was revised up by 17,000 to 249,000.

Eye on the Week Ahead

The latest data on inflation is available this week, with the release of both the Consumer Price Index (CPI) and the report on retail sales. The CPI rose 2.7% in 2025, while prices excluding the more volatile food and energy categories increased 2.6%.