Major US stock market indices opened higher on Friday morning following the release of December employment data that presented a mixed picture of the labor market. The jobs report showed unemployment declining more than expected while job creation fell short of forecasts, keeping Federal Reserve rate cut expectations intact among investors.

Market Performance at Opening

The three major indices showed positive momentum at the opening bell, with investors digesting the latest employment figures:

The S&P 500 and Dow Jones showed modest gains, while the tech-heavy Nasdaq composite remained relatively flat during early trading.

December Employment Data Details

The December jobs report delivered mixed signals that have significant implications for Federal Reserve policy expectations:

While the unemployment rate declined to 4.4%, surpassing economists' forecast of 4.5%, the nonfarm payrolls data showed concerning weakness. Job creation totaled only 50,000 positions, significantly below the 73,000 that economists polled by Dow Jones had estimated.

Federal Reserve Rate Cut Implications

The sluggish job growth figures have reinforced market expectations for potential Federal Reserve interest rate cuts, according to analysts. Despite the positive unemployment rate decline, the weaker-than-expected job creation suggests underlying softness in the labor market that could influence monetary policy decisions.

Investors are closely monitoring these employment trends as they provide crucial insights into the Federal Reserve's future policy direction. The mixed nature of the December jobs data has maintained speculation about potential rate adjustments in upcoming Federal Open Market Committee meetings.

Market Outlook

Beyond the employment data, markets are also awaiting a potential US Supreme Court ruling on tariffs, which could provide additional direction for trading sessions. The combination of mixed employment signals and pending policy decisions continues to shape investor sentiment in early Friday trading.

US defense contractors dominated Thursday's trading session with substantial gains after President Trump announced ambitious plans to dramatically increase military spending as part of building what he termed the "Dream Military."

Defense Sector Leads Market Gains

Major defense companies posted impressive rallies following Trump's military spending announcement. The performance of leading defense contractors showed strong investor confidence in the sector's growth prospects:

These gains more than compensated for losses from the previous trading day, when Trump had criticized defense contractors for producing military equipment too slowly. RTX faced particular scrutiny, with Trump specifically noting it was the "slowest in increasing their volume," which explains its more modest performance compared to peers.

Military Spending Expansion Plans

Trump outlined plans to significantly boost US military expenditure, targeting an increase from the current $901 billion to $1.5 trillion by 2027. This represents a substantial expansion in defense spending that could benefit contractors across the military-industrial complex.

To address performance concerns, Trump signed an executive order Wednesday directing the Pentagon to include provisions in future contracts that would prohibit defense contractors from conducting stock buybacks during periods of underperformance on US government contracts.

Broader Market Performance

While defense stocks surged, the broader market showed mixed results during Thursday's session:

Economic Data and Market Factors

Mixed economic indicators influenced market sentiment. US unemployment benefit applications rose last week, indicating increased layoffs, though the increase aligned with economist expectations. Positive developments included better-than-expected worker productivity improvements during the summer and an unexpected shrinkage in the US trade deficit for October.

Oil markets experienced significant movement, with benchmark US crude climbing 2.10% to $57.18 per barrel and Brent crude rising 2.00% to $61.14 per barrel. These increases continued the volatile pattern following recent geopolitical developments, including Trump's actions regarding Venezuela's leadership and potential military considerations involving Greenland and Colombia.

Bond market activity showed the 10-year Treasury yield rising to 4.18% from 4.15% in the previous session, reflecting investor responses to the mixed economic data and policy announcements.