Investopedia Markets News (all except PF)

News of the day for Dec. 26, 2025

Thomas Fuller / SOPA Images / LightRocket via Getty Images

Nvidia this week announced a deal with startup Groq.

Stock futures were trending lower in early trading Friday following a fifth straight session of major market index gains in holiday-shortened trading Wednesday; gold and silver continued their record streak to hit new all-time highs; Nvidia agreed to buy assets from AI startup Groq; federal regulators are probing a door release issue in one Tesla model; Nike shares continued to climb after Apple CEO Tim Cook’s major stock purchase.

Here's what investors need to know today.

Stock Futures Point Lower

Stock futures pointed lower in premarket trading after the S&P 500 and Dow Jones Industrial Average set new closing records in Wednesday's holiday-shorted trading session, when the major market indexes moved higher for a fifth straight session. Futures associated with the Dow were lower by nearly 0.2% in early trading, while those tied to the S&P 500 were fractionally lower. Futures tracking the Nasdaq crept higher. U.S. benchmark crude oil futures were at nearly $58.50 a barrel as the commodity stayed near two-week highs. Bitcoin traded at $88,600, higher than the $87,400 it hit on Wednesday. Yields on the 10-year Treasury note, which can influence a range of consumer loans, were at 4.14%, ticking higher from Wednesday’s levels.

Gold, Silver Extend Streak of Highs

Gold and silver again touched record highs on Friday as the precious metals continued to see their prices rise. Gold futures were trading around $4543.50 an ounce after earlier pressing as high as $4561.60. Silver futures were at $75.67 an ounce recently after earlier reaching a new high of $75.84. Precious metals continued to add value in December, with silver rising by more than 27% this month and gold adding more than 6%. Silver has more than doubled in value this year, while gold is up by more than 70%. Investors have been pouring into the safe-haven assets as investors anticipate lower interest rates and central banks have been adding to their holdings.

Nvidia to Buy Assets from AI Startup Groq

Nvidia (NVDA) has made a deal with artificial intelligence startup Groq, according to news reports and a post on the startup’s site. Groq in a statement said that Nvidia entered a non-exclusive licensing agreement for the startup’s inference technology.“The agreement reflects a shared focus on expanding access to high-performance, low cost inference,” it said. CNBC reported that the deal include an asset purchase worth $20 billion in cash, citing Alex Davis, CEO of Disruptive, which led a $750 million fundraising round for the startup.The move comes as AI stocks have been moving higher to end the year. Nvidia shares were higher by 0.6% in premarket trading.

Federal Regulators Probe Tesla Door Release Issue

The National Highway Traffic Safety Administration said it earlier this week opened an investigation into Tesla (TSLA) after it received a petition saying the mechanical door release for the 2022 Tesla Model 3 wasn’t easily accessible. “The petition cites allegations that the mechanical door release is hidden, unlabeled, and not intuitive to locate during an emergency,” the NHTSA's Office of Defects Investigation said. The issue is expected to affect about 179,000 vehicles. The NHTSA had opened other investigations into Tesla, including a probe on electronic door lock issues with a different model. Tesla shares ticked higher in premarket trading.

Nike Shares Continue Rise After Apple CEO Stock Purchase

Nike (NKE) shares continued to rise in premarket trading after the athletic apparel maker helped lead stocks higher in Wednesday’s session. Nike shares gained 4.6% Wednesday after a regulatory filing revealed that Apple CEO Tim Cook, a member of Nike's board, bought nearly $3 million worth of the company’s stock. Despite the surge, Nike shares are lower by 20% so far this year. Nike shares were higher by nearly 0.4% in premarket trading.

Investopedia / Photo Illustration by Alice Morgan / Getty Images

Some major changes to the Social Security program will go into effect in 2026.

KEY TAKEAWAYS

• Social Security beneficiaries will receive a 2.8% increase in their payments next year, and a new tax deduction will lower the tax burden for many seniors.
• The Social Security Administration has begun implementing modernization changes to the agency, including all digital payments and a transition away from in-person field offices.

If you're collecting Social Security payments next year, there are several changes to the program that will affect your 2026 benefits. Here's what you need to know.

The first Social Security check of 2026 will be issued on Jan. 2 for beneficiaries who started collecting Social Security payments before May 1997, as well as those who also receive Supplemental Security Income.

Retirement, spousal, and survivor benefits will be paid on Jan. 14 to those born between the first and 10th of any month. Benefits for those born between the 11th and 20th of any month will be distributed on Jan. 21, and those with a birthday between the 21st and 31st of any month will receive their payments on Jan. 28.

Why This Matters to You

The Social Security program is a critical foundation for the U.S. economy. It benefits more than 70 million Americans and helps drive consumer spending, as most of the payments are spent on food, housing, and health care.

Your Benefits Will Grow By 2.8% Next Year

The annual cost-of-living adjustment for 2026 Social Security benefits will be 2.8%, or about $56 more per month, starting in January.

This increase in benefits is calculated based on inflation during the third quarter of 2025, and is intended to help beneficiaries keep pace with rising costs. However, experts say the 2026 COLA will not be enough for many seniors.

In particular, the cost of premiums for Medicare Part B, the federal health insurance used by millions of Americans who are disabled or receive Social Security payments, is expected to rise by 11.6% next year. This increase will completely wipe out the beneficiaries' 2026 COLA increase.

On top of that, Social Security experts and advocates note that seniors generally have higher expenses than the average worker, which means the formula used to calculate the annual COLA doesn't accurately reflect the rising costs that most of them face.

Everything Will Be Digital

The Social Security Administration has taken several steps this year to modernize its systems and payments, and that will continue into the new year.

At the end of September, the SSA transitioned to completely digital payments and has completely stopped issuing physical Social Security checks. Beneficiaries who previously received physical payments can opt to get their payments via a direct deposit or a Direct Express card.

The modernization changes have also included shrinking staff at in-person field offices, and will instead have that staff support the agency's 800-number. Updates to the Social Security website include a chatbot and a feature that allows Americans to view their Social Security number digitally, among others.

These updates, the agency said, will lower wait times on the phone and in field offices, improve fraud detection, and reduce paperwork and mailing costs. However, Social Security beneficiary advocates say the rapid pace at which these changes have been implemented could confuse some beneficiaries and disrupt benefits for those who lack access to high-speed internet and computers.

A New Tax Break For Beneficiaries

A new tax deduction for Americans 65 years and older will lower next year's tax bill for many Social Security beneficiaries, giving their budgets more wiggle room.

The additional deduction for seniors is intended to mitigate the federal income taxes that beneficiaries must pay on their Social Security benefits, allowing them to deduct $6,000 per individual from their 2025 taxable income. This will lower their overall tax burden when they file their taxes in April.

In the 2026 tax filing season, seniors can take both the new deduction as well as the additional standard deduction that's already provided for seniors under existing law. The new deduction phases out for taxpayers with a modified adjusted gross income over $75,000.

Proposed Changes To Watch For In 2026

There were a few more proposed changes put forward this year that could go into effect in 2026. Some of these proposals would increase payments, while others would reduce or eliminate benefits for certain individuals.

To help seniors cope with the increasing costs of essentials like prescription drugs and groceries, a bill was introduced to the Senate in October that would raise Social Security payments by $200 a month from January to June 30.

The Trump administration has promised not to cut Social Security, and said it is not planning to raise the retirement age for the program. However, the White House has proposed other changes to the program that could result in hundreds of thousands of beneficiaries being cut from the Supplemental Security Income and Social Security Disability Insurance programs.

Timon Schneider / SOPA Images / LightRocket via Getty Images

Motive Technologies could go public in 2026.

What You Need to Know

• Alphabet-backed Motive Technologies this week filed a statement with the SEC indicating the fleet management software company's its intention to go public.
• The news marks another sign that 2026 could be a busy year for new listings and, particularly, those linked to AI.

Next year is shaping up to be a busy one for IPOs. Add Motive Technologies to the list.

The AI-enabled fleet management software firm filed its Form S-1 registration statement with the Securities and Exchange Commission on Tuesday, saying it had applied to list on the New York Stock Exchange using the symbol "MTVE." The company has not said how many shares it intends to sale, or at what price.

Why This Matters to Investors

Experts generally believe 2026 could be a banner year for IPOs, which can represent a signal for investor optimism—especially if those offerings are received when they actually hit the market. Next year is seen as potentially heralding both a solid number of new offerings, and some big ones.

Next year is expected to be a busy year for IPOs—and to include some potentially massive offerings. Tech firms expected to file next year include Elon Musk's SpaceX, OpenAI and Anthropic. Renaissance Capital in its 2026 outlook for IPOs estimated some 200 of them next year, raising as much as $60 billion.

"We expect to see the past year’s uptick in venture-backed issuance to continue, particularly as more AI-related companies mature and seek to tap into growing demand from public investors," Renaissance wrote. "Themes like fintech, healthtech, digital assets, and defense should carry into the coming year."

San Francisco-based Motive, whose Series F convertible preferred stock owners include Alphabet's (GOOGL) Google Ventures, said revenue for the nine months through Sept. 30 rose 22% year-over-year to $327 million. It estimates that its technology has helped prevent thousands of accidents, save lives and offer customers fuel and fraud savings.

The company in its filing said it intended to use the proceeds from the offering for "working capital and other general corporate purposes." Bloomberg this summer said Motive raised $150 million at an undisclosed valuation.

Unique Nicole / WireImage

Tim Cook, Apple's CEO, is also a member of Nike's board.

Key Takeaways

• Shares of Nike rose Wednesday, helped by news of a buy from Apple CEO Tim Cook, a member of the company's board.
• Cook bought at average prices near $59, well below Wall Street analysts' consensus price target around $80.

A vote of confidence from the leader of one big brand is helping the shares of another today.

Shares of Nike (NKE) climbed on Wednesday's holiday-shortened trading session—the shares were recently up about 4.5%, leading all gainers on the S&P 500—following an expression of support from Apple CEO Tim Cook.

Why This Matters to Investors

As a general rule, investors sell shares when they think they have better uses for the money—and those reasons can be hard to divine. The other side of that coin is that investors only buy shares when they think they're poised to rise. That's why watching the trades of people associated with a particular company is part of many investors' strategies.

A regulatory filing revealed that Cook, a member of Nike's board for two decades, bought nearly $3 million worth of Nike stock on Monday, acquiring 50,000 shares—a rough doubling of his stake—at a weighted average price of $58.97, not far off Friday's close.

Even with today's surge, Nike shares have lost about 20% of their value this year. The company is about a year into a turnaround launched by CEO Elliot Hill, and while management believes it's made substantial progress investors are still wary.

Whatever investors may think of the shares, Wall Street analysts are generally positive. The mean price target as tracked by Visible Alpha is around $80, substantially above recent prices closer to $60.

"We think consensus estimates are bottoming and see several catalysts that could drive healthier growth," Bank of America analysts wrote recently. "We expect gradual progress on innovation will begin to offset the sell down of older styles."

Sheldon Cooper / SOPA Images / LightRocket via Getty Images

Sanofi has agreed to buy Dynavax, news that sent the latter's shares higher Wednesday.

Key Takeaways

• Sanofi will pay $2.2 billion for Dynavax Techologies as it looks to add another Hepatitis B and new shingles vaccines to its portfolio.
• The deal will pay Dynavax investors $15.50 per share, a 39% premium from Tuesday's closing price.

Shares of Dynavax Technologies (DVAX) skyrocketed after French drugmaker Sanofi (SNY) said it would buy the biopharmaceutical firm for $2.2 billion to expand its Hepatitis B offerings and enter the shingles vaccine market.

Sanofi said it would be paying Dynavax investors $15.50 per share in cash, a 39% premium to its closing price yesterday. Dynavax shares were recently trading just a few cents below Sanofi's price for its shares. The transaction is expected to close in the first quarter of next year. 

Why This Matters to Investors

One strategy of drug-development investors is to buy shares of companies they think are candidates for a buyout by bigger companies who either think they can help their products find larger markets, or believe their developmental treatments will soon prove more valuable as they move through testing.

Dynavax currently has regulatory approval for its Heplisav-B Hepatitis B shot, a two-dose regimen for adults given over a month’s time. It also is in a Phase 1/2 trial of a shingles treatment called Z-1018, and has other candidates in the works. 

Thomas Triomphe, executive vice president of vaccines at Sanofi, said the additions of Heplisav-B and Z-1018 “bring new options to our portfolio and underscore our commitment to providing vaccine protection across the lifespan.”

Sanofi said there is an “unmet need” for Hepatitis B and shingles treatments, as nearly 100 million people in the U.S. who were born before 1991 are unvaccinated. Dynavax CEO Ryan Spencer said the deal "will provide the global scale and expertise needed to maximize the impact of our vaccine portfolio."

Shares of Dynavax have spent most of 2025 in negative territory, but with today’s gains they’re now up about 19% year-to-date.

Thomas Fuller / SOPA Images / LightRocket via Getty Images

UiPath has seen its shares rise some 30% in 2025.

Key Takeaways

• UiPath is set to join the S&P MidCap 400 index on Friday, replacing Synovus Financial.
• S&P Dow Jones Indices also announced changes to the index slated for early January.

Shares of UiPath rose Wednesday on news that the business software company will join the S&P MidCap 400 Index.

S&P Dow Jones Indices said UiPath (PATH) would become part of the index prior to the opening of trading on Friday. It will replace Synovus Financial (SYN), which is being acquired by Pinnacle Financial Partners (PNFP) in a deal expected to close soon.

Why This Matters to Investors

A stock's inclusion in the S&P 500 or other index doesn't guarantee better days ahead, but it can be seen as a bullish signal since it can mean exposure to a new set of investors and possible purchases by funds who track those indexes.

S&P Dow Jones also said that Versant Media Group (VSNTV), a spinoff of media giant Comcast (CMCSA) would replace Brandywine Realty Trust (BDN) in the S&P SmallCap 600 Index ahead of the open on Jan. 6. The spinoff is anticipated to be completed a day earlier.

Comcast is set to remain in the S&P 500 Index. A number of updates to the makeup of the S&P 500 have recently been announced.

Inclusion in an index can be beneficial to a stock, because it becomes exposed to more potential investors and allows it to be included in funds that track those indices. 

UiPath shares were up some 5% in recent trading. They have added about 30% of their value this year.

News of the day for Dec. 24, 2025

Spencer Platt/Getty Images

Wednesday's session will be shortened ahead of Christmas Eve.

Stock futures are little changed after yesterday’s record for the S&P 500; trading ends early today for the Christmas Eve holiday; gold and silver hit records for a third straight day; shares of AI software maker UiPath rose on its coming inclusion in a mid-cap benchmark index; energy giant BP said it would sell a major stake in its Castrol lubricants division as part of its plan to return focus to oil production.

Here's what you need to know today.

Stock Futures Make Muted Premarket Moves

Stock futures were essentially flat in premarket trading ahead of a shortened Christmas Even session after another record closing high for the S&P 500, which came as major stock indexes moved higher for a fourth straight session. Futures trading tied to the S&P 500, Dow Jones Industrial Average and Nasdaq were fractionally lower. U.S. benchmark crude oil futures were around $58.50 a barrel as the commodity stayed near two-week highs.

Bitcoin traded at $87,300, down slightly from an earlier high closer to $89,000. Yields on the 10-year Treasury note, which can impact mortgage rates and a range of other consumer loans, were at 4.16%, a tick lower from yesterday’s trading levels. Today's calendar is light, though investors will be watching weekly jobless claims data.

Stock, Bond Markets Closing Early for Christmas Holiday

It will be a short trading session today as markets close early for the Christmas holiday. The stock market will close at 1 p.m. ET, and the bond market at 2 p.m., for Christmas Eve, and remain closed through the holiday on Dec. 25. Both markets are closed on Jan. 1, 2026, for New Year's Day. Looking ahead, stock traders have a full day on New Year's Eve, though bond trading ends at 2 p.m. on Wednesday, Dec. 31.

Gold, Silver Continue to Reach New Highs

Precious metals continued their hot streak as gold and silver hit fresh all-time highs for a third straight day. Gold futures were higher by around 0.2% to trade at around $4,513 an ounce recently, while silver futures rose 1.3% to trade at around $72 an ounce. Gold futures recently hit $4,555 to trade at a record high, while silver also reached its highest-ever price. Gold and silver prices have been climbing as traders expect the Federal Reserve to continue cutting interest rates. Investors are also seeking a haven from geopolitical uncertainty and a weakening U.S. dollar. Gold prices have risen around 70% this year, while silver has more than doubled.

UiPath Jumps on Entry Into S&P MidCap 400

UiPath (PATH) shares are rising by some 8% in premarket action after the maker of automated software was set to join the S&P MidCap 400, replacing Synovus Financial Corp. (SNV). UiPath will join the index before trading starts on Jan. 2, 2026. The S&P MidCap 400 Index tracks the performance of companies in the mid-range of market capitalization. Shares of UiPath are higher by more than 25% on the year on investor optimism that the company can be a winner in the artificial intelligence trade. Shares of Synovus shares were edging lower premarket.

BP to Sell Stake in Castrol

Oil giant BP (BP) agreed to sell a 65% stake in its Castrol lubricants business to investment firm Stonepeak. BP is to take in about $6 billion for the sale, which is expected to be completed by the end of 2026. The move is part of the oil company’s efforts to focus its business on oil production after its shift to more renewable energy delivery proved unpopular with investors.  “The sale marks an important milestone in the ongoing delivery of our reset strategy,” said BP interim CEO Carol Howle. Meg O’Neill will become the company's CEO in April. U.S.-listed shares of BP were little changed in early trading.

SAUL LOEB / AFP via Getty Images

The Federal Reserve is likely to see new members join its board in 2026.

Key Takeaways

• Federal Reserve Chair Jerome Powell's leadership term will expire in 2026, providing an opportunity for President Donald Trump to nominate a candidate who would be more favorable to interest rate cuts.
• The rotation of regional bank president voters isn’t seen as meaningfully changing the Fed’s path on interest rates.

Significant changes are anticipated for the Federal Reserve in 2026—but they're not guaranteed to change the path of interest rates.

Jerome Powell’s term as the chair of the Federal Reserve’s Board of Governors is set to expire in May 2026 and President Donald Trump is already looking for a new leader of the central bank. The president has clashed with Powell publicly in the past year, and economists have been concerned that Trump is looking to interfere with the Fed's independence.

Openings on the Federal Reserve Board will potentially allow President Trump to appoint members who are more likely to support his position, which favors aggressive interest rate cuts.

Why This Matters for the Economy

The Federal Reserve’s regulation of interest rates can have a significant impact on the economy, affecting the cost of mortgages, car loans, and credit card debt. Its policies help maintain stable prices and employment, shaping the overall cost of living and health of the labor market.

So far, White House Economic Adviser Kevin Hassett has emerged as the front-runner for the position, though there are questions about which spot at the Federal Reserve he could fill. Other possibilities for the role include current Federal Reserve Governors Christopher Waller and Michelle Bowman, as well as former Fed Governor Kevin Warsh and BlackRock Senior Managing Director Rick Rieder.

Will Powell, Miran, and Cook Stay in 2026?

One question is whether Powell will stay on the board after his term as chair ends. Powell’s term on the board of governors doesn’t expire until 2028, which means Powell could stay as a voting member of the Federal Open Market Committee (FOMC), even if he isn’t leading the meetings. Traditionally, Fed chairs leave the board after their leadership term expires, but Powell hasn’t said whether he intends to remain on the board.

There’s also the question of what will happen with current board member Stephen Miran, whose term ends in January 2026. Miran has consistently advocated for aggressive interest rate cuts during his term on the board. He is serving the remaining term of former Governor Adriana Kugler and could return to his role as chairman of the White House Council of Economic Advisers, which he left to take the short-term appointment as a Fed governor.

The board makeup could change even further if Trump is able to successfully fire Governor Lisa Cook, who is challenging the president’s attempts to remove her from her position in court. Wells Fargo economists rated Cook as more likely to support interest rate cuts, so Trump’s moves to replace her may not yield a significant voting change on the FOMC.

Changes in Regional Governor Voting May Not Alter FOMC’s Path

While new appointments may offer Trump a chance to steer the influential economic institution, there may not be a lot of room on the board to significantly change the direction of the central bank that has already begun moving to lower interest rates.

“Even with the transition to a new Fed Chair in the second quarter of 2026, we expect the Fed’s reaction function to be roughly unchanged as most of the Committee itself will remain in place well into 2027,” said Seth Carpenter, Morgan Stanley chief global economist.

Other voting changes are coming to the FOMC, which includes a rotating group selected from the 12 regional bank presidents.

Rotating in as FOMC voters are Cleveland’s Beth Hammack, Dallas’ Lorie Logan, Minneapolis’ Neel Kashkari, and Philadelphia’s Anna Paulson. They will take the voting spots held in 2025 by Kansas City’s Jeff Schmid, St. Louis’ Alberto Musalem, Boston’s Susan Collins, and Chicago’s Austan Goolsbee. 

The rotation of new FOMC voters may not result in much change of direction, as a review by Wells Fargo economists showed that the replacements largely hold similar views on interest rates as their predecessors.

New President Coming in Atlanta

There will be at least one new regional bank president in 2026. Atlanta Fed President Raphael Bostic said he will not seek to stay on at the conclusion of his term in February 2026.

The U.S. president doesn’t have a direct role in appointing regional bank presidents, who are selected by each bank’s board of directors through an executive search process. The Atlanta Federal Reserve president doesn’t have a voting role on the FOMC again until 2027.

Take A Number: A Striking Figure In Economic News Today

Marcus Ubungen / Los Angeles Times via Getty Images

Santas are facing a tough job market too.

Key Takeaways

• Developments in Santa jobs this year mirror trends in the overall workforce, with job listings down and pay rising for workers with in-demand characteristics, in this case, real beards.
  
• Real-bearded Santas make $9 an hour more than their fake-whiskered counterparts, one analysis found.
  
• Job listings for Santa have plummeted 35% since 2024 due to dying malls and a shift to online sales.
  

Having a real beard is worth an extra $9 an hour for people who work as Santas, an analysis of job postings found.

Demand for Santas with real beards has surged over the past three years, and their pay has gone up accordingly, even as the overall number of Santa jobs has declined, according to a report Tuesday by Revelio Labs, a data analytics company. Pay advertised for real Santas with real beards averaged $30.84 an hour compared to $21.83 for those who must don false whiskers.

What This Means For Your Finances

If you work as a part-time Santa, it now pays more than ever to grow out a beard.

Revelio created the report by analyzing job postings on professional networking websites.

In some ways, the trend among Santas mirrors the trajectory of the overall job market: there are fewer jobs available, while workers with in-demand skills are commanding higher salaries.

Overall job listings for Santas have fallen 35% since 2024. At the same time, employers have gotten pickier, with 70% of job postings now demanding real beards compared to 14% in 2022. The median wage for Santas was $25 an hour, up from $21.89 in 2022.

"The culprits are familiar: retailers tightening budgets, mall vacancies rising, and the traditional holiday photo experience losing ground to online shopping," Caelan Wilkie-Rogers and Paulina Tilly, researchers at Revelio, wrote in a blog post. "Despite a growing need for holiday cheer amid rising costs of living and declining consumer sentiment, employers are hiring fewer Santas than ever."

Spencer Platt / Getty Images

People are having a hard time finding work, but at the same time, companies are struggling to find qualified candidates.

Key Takeaways

• The U.S. is on track for slow job growth in 2026, according to forecasters.
  
• Tariff-related uncertainty is curtailing hiring, and it's possible A.I. adoption is also hurting job openings.
  
• Trump's immigration crackdown is also reducing the number of available workers, making it harder for employers to find qualified staff.
  

Is the labor market getting worse for employers, or for job seekers? Yes. And forecasters expect that to continue into the new year.

Several trends have combined to create a labor market that isn't working out well for anyone. Job seekers are seeing fewer openings and staying unemployed longer—the long-term unemployment rate hit its highest since November 2021 in September.

Yet, employers are having a hard time finding qualified candidates, with certain industries, such as homebuilding, suffering from labor shortages. The result has been a sharp slowdown in job creation. The job market actually lost jobs in two months in 2025, something that hadn't happened since the pandemic.

Economists forecast the U.S. economy will add an average of just 57,000 jobs per month in the first quarter of 2026, according to a survey of professional forecasters by the Federal Reserve Bank of Philadelphia.

That's a sharp slowdown from the pre-tariff era. In the 12 months through April, when President Donald Trump announced his sweeping "Liberation Day" tariffs, job creation averaged 147,000 jobs per month. Since then, it has slowed to just more than a quarter of that level, at 38,600 per month.

What This Means For The Economy

Slower hiring and rising long-term unemployment suggest that employers and workers are struggling to adjust to a new economic environment that's defined by uncertain trade policies, higher borrowing costs and persistent skills mismatches. The job market is decelerating, which is a bad sign for the health of the U.S. economy in 2026.

If experts are correct, it's no coincidence that job creation started to sputter when Trump announced worldwide tariffs. Business leaders and economists say the frequently changing trade policies is a major factor in the slowdown. Without much certainty about what tariffs they will have to pay on what items in the months and years ahead, companies have pulled back on expansion and hiring plans.

On top of that, businesses are increasingly using AI, which may also have an effect on the workforce. Whether employers replace large numbers of employees with AI could shape the job market in 2026.

This fall, economists at Goldman Sachs estimated AI will eventually replace 6% to 7% of existing jobs. However, if past technological innovations are any indication, new careers could emerge in their place.

Reduced Immigration Hurts The Workforce

As the demand for workers has fallen, so too has the supply. Trump's crackdown on immigration has seriously reduced the number of people coming to the U.S. to work. Although economists debate the exact number of immigrants missing from the workforce, there is no doubt that the numbers have decreased significantly.

The Federal Reserve Bank of San Francisco estimated that 500,000 immigrants will arrive in the U.S. in 2025, down from 2.2 million in 2024, cutting the size of the workforce. Under one scenario modeled by Fed researchers in which the Trump administration deports one million people, the workforce essentially stops growing in 2025 and begins to shrink in the coming decades.

The Labor Market Paradox

Economists, not to mention officials at the Federal Reserve, aren't sure whether the main problem with the job market is a lack of jobs, a lack of workers, or both.

"It's still unclear to what extent decelerating job growth is being driven by falling labor demand versus labor supply," Preston Caldwell, chief U.S. Economist at Morningstar, wrote in a commentary after the September jobs report was belatedly released in November.

The debate has implications for borrowing costs on all kinds of loans: Several officials on the Federal Reserve's policy committee have said they believe labor demand is falling faster than supply, meaning that the unemployment rate could rise. That could lead the Fed to cut interest rates in the coming year, in an effort to boost hiring.

There is no guarantee that they will, and if they do, whether those cuts will be successful. Either way, that could be the major story for the labor market in 2026.