U.S. stock markets surged to fresh record highs on Friday, buoyed by a mixed December jobs report that reinforced stability in the labor market while potentially delaying immediate Federal Reserve interest rate cuts. The rally demonstrated investor confidence despite mixed economic signals.

Market Performance Overview

Major indices posted solid gains across the board, with all three primary benchmarks setting new records:

The Nasdaq composite led the market advance, while the S&P 500 topped its previous all-time high set earlier in the week.

Jobs Report Drives Market Sentiment

The U.S. Labor Department's December employment report delivered mixed signals that investors interpreted positively. While employers hired fewer workers than economists anticipated, the unemployment rate improved beyond expectations. This combination reinforced the concept of a "low-hire, low-fire" labor market that may help the economy avoid recession.

The employment data prompted traders to reduce expectations for immediate Federal Reserve action. The probability of a rate cut at the Fed's upcoming meeting dropped to just 5% from 11% the previous day, according to CME Group data. However, market participants still largely expect at least two rate cuts during the upcoming year.

Sector Leaders and Corporate Developments

Top S&P 500 performers included:

Vistra emerged as a standout performer, soaring 10.5% after announcing a 20-year agreement to supply electricity from three nuclear plants to Meta Platforms. This deal reflects the growing trend of Big Tech companies securing power sources for artificial intelligence data centers. Similarly, Oklo jumped 7.9% following its own nuclear fuel agreement with Meta Platforms for a facility project in Pike County, Ohio.

Housing Sector Rally

Homebuilders and housing-related companies posted strong gains following President Trump's announcement of a plan to reduce mortgage rates through a $200 billion mortgage bond purchase program. The initiative mirrors previous Federal Reserve bond-buying strategies designed to lower borrowing costs.

Housing sector performance:

• Lennar: +8.9%
• D.R. Horton: +7.8%
• PulteGroup: +7.3%
• Builders FirstSource: +12.0%

Notable Decliners

General Motors fell 2.7% after announcing a $6 billion charge for the fourth quarter related to its electric vehicle pullback, adding to the $1.6 billion in charges from the previous quarter. Reduced tax incentives and relaxed fuel-emission regulations have dampened EV demand.

WD-40 tumbled 6.6% following weaker-than-expected quarterly profit results, though management attributed the shortfall to timing issues rather than underlying demand weakness.

Bond Market and Fed Outlook

Treasury yields showed mixed movement, with the 10-year yield easing to 4.16% from 4.19%, while the two-year yield rose to 3.53% from 3.49%. A separate University of Michigan consumer sentiment report suggested strengthening confidence, particularly among lower-income households, with inflation expectations potentially reaching their lowest level in a year.

The combination of stable employment conditions and moderating inflation expectations may provide the Federal Reserve with flexibility for future rate adjustments, though timing remains uncertain given mixed economic signals.

US stock markets advanced Friday despite mixed employment data that showed weaker job creation but declining unemployment rates. Investors remained cautious as they awaited a potential Supreme Court ruling on the legality of sweeping global tariffs implemented under the International Emergency Economic Powers Act.

Mixed Employment Data Shapes Market Sentiment

The US Labor Department reported that the economy added 50,000 jobs last month, falling short of market expectations and continuing a year-long trend of labor market weakness that prompted Federal Reserve interest rate cuts. However, the unemployment rate improved to 4.4%, while average wages maintained their upward trajectory.

Briefing.com analyst Patrick O'Hare noted that "the key takeaway is that the low unemployment rate will temper concerns that consumer spending and the economy will slow rapidly due to a weak labour market." However, he added that this data "will also likely keep the Fed's next rate cut at bay."

Stock Market Performance and Key Movers

Wall Street's major indices opened higher, with the Dow Jones adding 0.2%. The mixed employment data maintained what Forex.com analyst Fawad Razaqzada described as the "goldilocks scenario intact for stocks," where labor market weakness enables Fed rate cuts without threatening recession.

S&P 500 Top Performers

S&P 500 Notable Declines

Global Market Developments

International markets demonstrated strength, with major European indices in Frankfurt, London, Paris, and Seoul reaching record highs during the week. Paris set a new all-time high in afternoon trading, driven by optimism in technology and defense sectors.

In London, Swiss mining giant Glencore surged 10% after confirming merger discussions with Australian-British rival Rio Tinto, which declined 2%. The positive momentum continued despite France's opposition failing to block EU approval of the trade agreement with Brazil and other Mercosur bloc nations.

Asian Markets and Chinese Economic Data

Asian markets posted mostly positive results, with Hong Kong and Shanghai benefiting from Chinese inflation figures. Consumer prices in China increased 0.8% last month, marking the fastest pace since February 2023 and extending growth following months of deflationary pressure. Analysts noted that the increase primarily reflected higher food costs, potentially masking broader economic weaknesses.

Commodity Markets and Geopolitical Factors

Oil prices extended gains after rallying more than 3% Thursday, rising an additional 1% Friday. The increases followed Trump's threats against Iran regarding treatment of protesters amid civil unrest over economic crisis. Markets also responded to Trump's announcement that major oil companies pledged $100.00 billion investment to revive Venezuela's oil sector ahead of his meeting with industry executives.