U.S. equity markets closed higher on Friday following a December jobs report that reinforced labor market stability, with the S&P 500 gaining 1.2% and the Nasdaq Composite rising 1.6%. The data alleviated recent investor concerns about a potential economic slowdown.
- December nonfarm payrolls rose by 228,000, surpassing the forecast of 175,000
- Unemployment rate remained unchanged at 3.9%
- Average hourly earnings increased 0.4% month-over-month
- S&P 500 gained 1.2%, Nasdaq Composite rose 1.6% on Friday
- 10-year Treasury yield declined to 4.18% following the report
- Core inflation stood at 3.6% year-over-year in December
U.S. stock indices advanced significantly on Friday, driven by stronger-than-expected labor market data from December. The S&P 500 climbed 1.2%, marking its third consecutive day of gains, while the Nasdaq Composite posted a 1.6% increase, led by technology stocks. The Dow Jones Industrial Average rose 0.8%, reflecting broad-based optimism across sectors. The pivotal moment came with the release of the December nonfarm payroll report, which showed 228,000 new jobs added—well above the projected 175,000. The unemployment rate held steady at 3.9%, signaling that job growth is occurring without a corresponding spike in inflationary pressures. Average hourly earnings rose 0.4% month-over-month, a sign of sustained wage growth that supports consumer spending without triggering immediate Federal Reserve rate hikes. Investors interpreted the data as a clear signal that the labor market remains robust despite elevated interest rates. The 10-year Treasury yield dipped to 4.18% from 4.31% earlier in the week, indicating reduced expectations for aggressive rate tightening. This shift boosted equity valuations, particularly in sectors sensitive to interest rate sensitivity, such as real estate and technology. The rally also underscored a growing consensus that the U.S. economy is navigating a soft landing. With inflation cooling to 3.2% year-over-year in December and core inflation at 3.6%, markets are pricing in a slower pace of rate cuts. The Fed’s next policy meeting is scheduled for March 2026, where investors are now looking for signals that rate reductions may begin later than previously anticipated.