Softer U.S. jobs spurred risk-on rally
Key Points
- The softer headline and downward revisions to the payrolls report prompted a reassessment of Fed easing odds and lifted S&P futures.
- An early rally led by cyclical and small-cap stocks drove outperformance in materials and utilities while healthcare and financials lagged.
- Company-level positives, including stronger-than-expected December revenue at TSM and reported power agreements at META, added upside pressure on technology and cyclicals.
- Deal activity, from Boyd Group's completed acquisition to announced purchases by First Community and Haemonetics, supported select stock movers and sustained market breadth.
Global Market Summary
U.S. indexes closed higher as investors digested mixed labor-market data and growth signals; SPX rose 0.74%, ^IXIC climbed 0.93% and DJIA gained 0.53%. European benchmarks advanced with FRA40 up 1.44%, UKX up 0.80% and DAX up 0.53% amid a risk-on tone. Asian markets were firmer, with 000001.SS up 0.92% and HSI up 0.32%.
Top Movers
Materials and utilities led sector gains: XLB (+1.48%) and XLU (+1.33%) outperformed while healthcare (XLV -0.38%) and financials (XLF -0.17%) lagged. Notable stock movers included NBY (+70.92%), CGON (+29.76%) and APLD (+18.60%) on the upside, while ALM (-7.89%), MDGL (-7.31%) and MMSI (-7.28%) were the largest decliners.
Macro highlights
The U.S. December jobs report showed nonfarm payrolls rose by 50,000 and the unemployment rate fell to 4.4%, with prior months revised lower and average hourly earnings up 0.3% m/m and 3.8% y/y. Hiring gains were concentrated in health care, social assistance and food services while retail and parts of manufacturing reported losses. The softer headline and revisions prompted investors to reassess the timing of Federal Reserve easing and supported modest risk-on positioning while 10-year Treasury yields were little changed.
News that moved markets
The December jobs report and downward revisions prompted a quick market reassessment of Fed easing odds, lifting S&P futures and supporting modest equity gains. An early rally led by cyclical and small-cap stocks and company-level positives—stronger-than-expected December revenue at TSM and reported power agreements at META—added upside pressure on technology and cyclicals. Boyd Group Services completed the acquisition of Joe Hudson's Collision Center. Announced deals included First Community Corporation's purchase of Signature Bank of Georgia and Haemonetics' acquisition of Vivasure Medical Limited.
Upcoming session watchlist
- AU Westpac Consumer Confidence Change (JAN) — forecast 2.6% vs -9% prior, Jan 12, 11:30 PM | Shows household confidence and potential consumer demand over the near term.
- IN Inflation Rate YoY (DEC) — consensus 1.50% vs 0.71% prior, Jan 12, 10:30 AM | Measures consumer price momentum and informs near-term inflation pressure.
- JP Current Account (NOV) — forecast ¥3300.0B vs ¥2834B prior, Jan 12, 11:50 PM | Indicates external balance and net cross-border flows affecting trade and demand.
Key Takeaways
- U.S. indexes closed higher as markets priced the December jobs report and revisions, with broad gains across S&P, Nasdaq and the Dow.
- European benchmarks advanced and Asian markets were firmer as the risk-on tone extended, producing gains across major regional indices.
- Materials and utilities led sector gains while healthcare and financials lagged; notable individual stock moves included outsized gains and declines.
- Ten-year Treasury yields were little changed as investors shifted modestly into risk assets after the jobs revisions and company-level positives.
References
- 1. https://www.bls.gov/news.release/empsit.nr0.htm
- 2. https://x.com/BIS_org/status/2009558307183251666
- 3. https://x.com/RapidResponse47/status/2009422609981821078
- 4. https://x.com/Barchart/status/2009609398172406238
- 5. https://x.com/WhiteHouse/status/2009631911497572540
- 6. https://x.com/WhiteHouse/status/2009460581687021622
- 7. https://x.com/Barchart/status/2009464857503089128
- 8. https://x.com/WhiteHouse/status/2009420750709797025
- 9. https://x.com/Barchart/status/2009620647455146020
- 10. https://x.com/USTreasury/status/2009695322482651466
- 11. https://x.com/ecb/status/2009612161623216199
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