Positive Reaction To Jobs Data May Lead To Early Strength On Wall Street

The major U.S. index futures are currently pointing to a higher open on Friday, with stocks likely to move to the upside after closing mixed for two consecutive sessions.

Stocks may benefit from 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 may generate 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 may increase confidence in further rate cuts later this year.

After ending yesterday’s lackluster session on opposite sides of the unchanged line, the major U.S. stock indexes turned in another mixed performance during trading on Thursday.

While the Dow moved back to the upside after Wednesday’s pullback, the tech-heavy Nasdaq closed lower for the first time in four sessions.

The Dow climbed 270.03 points or 0.6 percent to 49,266.11, bouncing back toward the record closing high set on Tuesday. The S&P 500 also crept up by 0.53 points or less than a tenth of a percent to 6,921.46, but the Nasdaq fell 104.26 points or 0.4 percent to 23,480.02.

The mixed performance on Wall Street came as traders seemed reluctant to make more significant moves ahead of the release of the Labor Department’s closely watched monthly jobs report.

Ahead of the monthly jobs report, a report released by the Labor Department this morning showed first-time claims for U.S. unemployment benefits edged up by slightly less than expected in the week ended January 3rd.

The Labor Department said initial jobless claims crept up to 208,000, an increase of 8,000 from the previous week’s revised level of 200,000.

Economists had expected jobless claims to rise to 210,000 from the 199,000 originally reported for the previous week.

Energy stocks moved sharply higher as the price of crude oil skyrocketed, with the Philadelphia Oil Service Index spiking by 4.3 percent and the NYSE Arca Oil Index surging by 3.6 percent.

Substantial strength was also visible among housing stocks, as reflected by the 3.4 percent jump by the Philadelphia Housing Sector Index.

On the other hand, networking, biotechnology and semiconductor stocks showed significant moves to the downside, contributing to the drop by the tech-heavy Nasdaq.

Commodity, Currency Markets

Crude oil futures are rising $0.26 to $58.02 a barrel after spiking $1.77 to $57.76 a barrel on Thursday. Meanwhile, after edging down $1.80 to $4,460.70 ounce in the previous session, gold futures are climbing $36.40 to $4,497.10 an ounce.

On the currency front, the U.S. dollar is trading at 157.46 yen versus the 156.87 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1647 compared to yesterday’s $1.1658.

Asia

Asian stocks rose broadly on Friday, even as the upside remained limited as investors eyed U.S. jobs data and a U.S. Supreme Court ruling on the legality of President Donald Trump’s sweeping tariffs.

As geopolitical tensions and economic uncertainty mount, the pivotal December jobs report will offer additional clues on the economic outlook and the Federal Reserve’s path for interest rates.

The dollar continued to outperform its rivals, while U.S. Treasury yields moved sideways after Trump announced he would launch a $200 billion mortgage bond-buying program in an attempt to lower mortgage rates.

On the geopolitical front, European governments have launched a two-pronged diplomatic offensive to convince Trump to back away from his claims on Greenland.

The U.S. Senate advanced a resolution aimed at curbing Trump’s ability to take further military action against Venezuela.

China’s commerce ministry said the export ban on dual-use items to Japan will only affect military firms, helping ease concerns that the move could affect rare earth exports used in a wide range of products, from autos to defense equipment.

Gold ticked lower in Asian trading on dollar strength, while oil extended gains ahead of Trump’s meeting with the heads of major U.S. oil companies later today to convince them to support his plans in Venezuela.

China’s Shanghai Composite Index advanced 0.9 percent to 4,120.43 after data showed Chinese consumer inflation accelerated at the fastest pace in nearly three years in December, driven mainly by higher food costs.

The producer price index fell 1.9 percent year-on-year in the month, reinforcing expectations for further policy support.

Hong Kong’s Hang Seng Index closed up 0.3 percent at 26,231.79, led by gains in the technology sector.

Japanese markets surged on earnings optimism after Fast Retailing posted strong fiscal first-quarter earnings and also lifted its earnings outlook for the year. Shares of the Uniqlo clothing brand owner soared 10.7 percent.

Automakers also advanced on the back of a weaker yen, with Honda Motor and Toyota both rallying around 3 percent. The Nikkei 225 Index jumped 1.6 percent to 51,939.89, while the broader Topix Index settled 0.9 percent higher at 3,514.11.

Seoul stocks recovered from a subdued start to end notably higher. The Kospi climbed 0.8 percent to 4,586.32, setting a record high for the sixth consecutive session.

Rising geopolitical tensions lifted defense stocks and shipbuilders, with Hanwha Aerospace surging 11.4 percent and Samsung Heavy Industries jumping 8.7 percent.

Australian markets finished marginally lower after two days of gains. Mining stocks fell, with Rio Tinto tumbling 6.3 percent in its steepest one-day decline since July 2022 after confirming that it is in preliminary talks with Glencore on possible business combination, including an all-share merger.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index dipped 0.2 percent to 13,696.25.

Europe

After ending the previous session little changed, European stocks have moved mostly higher during trading on Friday.

Investor sentiment was underpinned after data showed German industrial output unexpectedly rose for a third straight month in November, helped by a rebound in car production.

The French CAC 40 Index is up by 1.1 percent, the U.K.’s FTSE 100 Index is up by 0.8 percent and the German DAX Index is up by 0.5 percent.

Mining giant Glencore has surged, while Rio Tinto has slumped. The companies have confirmed they are in preliminary discussions on a possible combination of some or all of their businesses, which could include an all-share merger between them.

Peer American has advanced after reports that its proposed merger with Canada’s Teck Resources is heading for antitrust clearance ?in Europe.

Gurit Holding has soared. The Swiss supplier of advanced composite materials, engineering services, and equipment has signed a five-year core material kits supply deal worth about CHF 250 million.

Herald Investment Trust has also surged. To resolve ongoing tensions with activist investor Saba Capital, the company has announced plans to launch a tender offer allowing shareholders to sell up to 100 percent of their shares at close to net asset value.

Halma, a life-saving technology company, has also moved to the upside after it agreed to acquire Italian firm Safetec Srl.

Dutch chip equipment maker ASML has also jumped after TSMC, the world’s largest contract chipmaker, reported higher than expected revenue for the fourth quarter.

Meanwhile, J Sainsbury has moved sharply lower. The U.K.’s second-largest supermarket chain reported a decrease in sales at its Argos chain over the all-important Christmas quarter.

U.S. Economic News

The Labor Department released a closely watched report on Friday showing employment in the U.S. increased by less than expected in the month of December.

The report 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 Labor Department 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.

New residential construction in the U.S. saw a steep drop in the month of October, according to a report released by the Commerce Department on Friday.

The report said housing starts plunged by 4.6 percent to an annual rate of 1.246 million in October after jumping by 1.2 percent to an annual rate of 1.306 million in September. Economists had expected housing starts to come in at an annual rate of 1.33 million.

The Commerce Department also said building permits dipped by 0.2 percent to an annual rate of 1.412 million in October after surging by 6.4 percent to an annual rate of 1.415 million in September.

Building permits, an indicator of future housing demand, were expected to come in at an annual rate of 1.35 million.

At 10 am ET, the University of Michigan is scheduled to release its preliminary reading on consumer sentiment in the month of January. The consumer sentiment index is expected to inch up to 53.5 in January from 52.9 in December.

Minneapolis Federal Reserve President Neel Kashkari is also due to deliver welcome remarks and participate in a fireside chat before the 2026 Regional Economic Conditions Conference at 10 am ET.

At 1:35 pm ET, Richmond Federal Reserve President Tom Barkin is scheduled to speak at the Maryland Bankers Association First Friday Economic Outlook Forum.