The broader market pulled back from its explosive momentum on Wednesday, as the President Donald Trump made a series of announcements which cooled some investor optimism from the start of the new year.
The Dow Jones Industrial Average (NYSE: DIA) dropped over 450 points to settle at 48,996.08, while the S&P 500 Index (NYSE: SPY) fell 0.3% to end the session at 6,920.93. The two major indexes both reached intraday highs during the session ahead of Trump's announcements on Wednesday. The tech-heavy Nasdaq Composite (NASDAQ: QQQ), meanwhile, rose nearly 0.2% to close at 23,584.27.
Trump on Wednesday said in a post on his social media platform Truth Social that the United States should bar institutional investors from purchasing single-family homes, pressuring private equity names like Blackstone (NYSE: BX) and Apollo Global Management (NYSE: APO).
The president also said in a separate post that his administration "will not permit" defense companies to issue dividends or stock buybacks until those firms increase production of military equipment.
"Defense Companies are not producing our Great Military Equipment rapidly enough and, once produced, not maintaining it properly or quickly," Trump wrote, sending shares of General Dynamics (NYSE: GD), Lockheed Martin (NYSE: LMT) and Northrop Grumman (NYSE: NOC) lower on Wednesday.
Trump singled out Raytheon (NYSE: RTX), calling the contractor "the least responsive to the needs of the Department of War, the slowest in increasing their volume, and the most aggressive spending on their Shareholders rather than the needs and demands of the United States Military."
The president ended his lengthy Truth Social post stating that military equipment "must be built now with the Dividends, Stock Buybacks, and Over Compensation of Executives, rather than borrowing from Financial Institutions, or getting the money from your Government."
On the economic front, U.S. private payrolls increased in December, the payrolls processing firm ADP reported Wednesday, with employers adding 41,000 positions to reverse November's loss of 29,000. November's print was also downwardly revised from its previous report of 32,000 losses.
"Small establishments recovered from November job losses with positive end-of-year hiring, even as large employers pulled back," said Nela Richardson, chief economist at ADP, in a statement.
The ADP's report comes ahead of the Bureau of Labor Statistics "official" monthly jobs report, which is expected to show non-farm payrolls adding 73,000 new positions in December and the unemployment rate ticking down to 4.5%.
U.S. job openings declined in November as hiring and layoffs both fell, the Bureau of Labor Statistics reported Wednesday. The Job Openings and Labor Turnover Survey (JOLTS) came in at 7.15 million openings in November, down 303,000 month-to-moth to mark the lowest rate since September 2024.
U.S. services sector activity, meanwhile, rose in December, as orders and employment each grew, the Institute for Supply Management reported Wednesday. The ISM services index increased 1.8 percentage points to 54.4% last month, signaling that the majority of companies surveys reported growth.
For Thursday, market participants will digest more labor market data as they trade ahead of Friday's December jobs data -- the first complete report after the U.S. government shutdown impacted November's reading.