Dow, S&P 500 Reach New Record Closing Highs Following Jobs Data

Stocks showed a lack of direction early in the session on Friday but moved mostly higher over the course of the trading day. The major averages all climbed firmly into positive territory, with the Dow and the S&P 500 reaching new record closing highs.

The major averages ended the day off their highs of the session but still posted notable gains. The Dow rose 237.96 points or 0.5 percent to 49,504.07, the Nasdaq advanced 191.33 points or 0.8 percent to 23,671.35 and the S&P 500 climbed 44.82 points or 0.7 percent to 6,966.28.

For the first full trading week of the new year, the Dow surged by 2.3 percent, while the Nasdaq and the S&P 500 jumped by 1.9 percent and 1.6 percent, respectively.

The strength on Wall Street reflected a positive reaction to the release of the Labor Department’s closely watched report on employment in the month of December.

With the report showing employment increased by less than expected in December, the data has led to some optimism about the outlook for interest rates.

The Labor Department said non-farm payroll employment rose by 50,000 jobs in December after climbing by a downwardly revised 56,000 jobs in November.

Economists had expected employment to rise by 60,000 jobs compared to the addition of 64,000 jobs originally reported for the previous month.

Meanwhile, the report said the unemployment rate edged down to 4.4 percent in December from a revised 4.5 percent in November.

The unemployment rate was expected to slip to 4.5 percent from the 4.6 percent originally reported for the previous month.

While the Federal Reserve is still widely expected to leave interest rates unchanged at its next meeting later this month, the report has increased confidence in further rate cuts later this year.

“This mix gives the Fed confidence that the labor market is cooling on schedule,” said Gina Bolvin, President of Bolvin Wealth Management Group.

She added, “For investors, it reinforces the case for rate cuts in early 2026 and favors a strategy focused on growth with discipline and income with durability.”

Positive sentiment may also have been generated in reaction to a report from the University of Michigan showing consumer sentiment has improved by slightly more than expected in the month of January.

The University of Michigan said its consumer sentiment index rose to 54.0 in January after climbing to 52.9 in December. Economists had expected the index to inch up to 53.5.

Sector News

Interest rate-sensitive housing stocks turned in some of the market’s best performances on the day, with the Philadelphia Housing Sector Index spiking by 5.7 percent.

Substantial strength was also visible among semiconductor stocks, as reflected by the 2.7 percent surge by the Philadelphia Semiconductor Index.

Networking, airline and utilities stocks also saw significant strength, moving higher along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan’s Nikkei 225 Index jumped by 1.6 percent, while China’s Shanghai Composite Index advanced by 0.9 percent.

The major European markets have also moved to the upside on the day. While the French CAC 40 Index shot up by 1.4 percent, the U.K.’s FTSE 100 Index climbed by 0.8 percent and the German DAX Index rose by 0.5 percent.

In the bond market, treasuries moved modestly higher after coming under pressure in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, dipped 1.2 basis points to 4.171 percent.

Looking Ahead

Next week’s trading may be impacted by reaction to the latest batch of U.S. economic data, with reports on consumer and producer price inflation likely to be in the spotlight.

Business News