Stock market ticks up toward records after mixed job market data
U.S. stocks are rising toward records Friday following a mixed report on the U.S. job market, one that may delay another cut to interest rates by the Federal Reserve but does not slam the door on it.
The S&P 500 climbed 0.5% in midday trading and was on track to top its all-time high set earlier in the week. The Dow Jones Industrial Average added 237 points, or 0.5% and was also heading toward a record. The Nasdaq composite was 0.7% higher, as of 11:45 a.m. Eastern time.
The gains came after the U.S. Labor Department said employers hired fewer workers in total during December than economists expected, though the unemployment rate improved and was better than expected. It reinforced how the U.S. job market may be in a “low-hire, low-fire” state.
On Wall Street, power company Vistra soared 11.9% to lead the market after signing a 20-year deal to provide electricity to Meta Platforms from three of its nuclear plants. Big Tech companies have been signing a string of such deals to electrify the data centers powering their moves into artificial-intelligence technology.
Oklo jumped 12.3% after saying it also signed a deal with Meta Platforms that will help it secure nuclear fuel and advance its project to build a facility in Pike County, Ohio.
Homebuilders and other companies involved in the housing market were also strong in their first trading after President Donald Trump announced a plan to lower mortgage rates. Trump on late Thursday called for the purchase of $200 billion in mortgage bonds, similar to how the Fed in the past has bought bonds backed by mortgages to bring down mortgage rates.
Builders FirstSource, a supplier of building products, jumped 8.5% for one of the biggest gains in the S&P 500 after Vistra. Among homebuilders, Lennar rose 5.1%, PulteGroup rose 4.9% and D.R. Horton climbed 4.8%.
They helped offset a 3.3% drop for General Motors. The auto giant said it will take a $6 billion hit to its results for the last three months of 2025 related to its pullback from electric vehicles. That’s on top of the $1.6 billion in charges GM took in the prior quarter. Fewer tax incentives and easier fuel-emission regulations have been eating into demand for EVs.
WD-40 tumbled 5% after reporting a weaker profit for the latest quarter than analysts expected. Chief Financial Officer Sara Hyzer said the soft numbers were primarily because of timing issues, not weaker demand from end customers, and the company stood by its financial forecasts for the upcoming year.
In the bond market, Treasury yields were mixed following the mixed jobs report.
The improvement in the unemployment rate was enough to get traders to ratchet back expectations for a cut to interest rates at the Fed’s next meeting, which is scheduled for later this month. Traders are now forecasting just a 5% chance of that, down from 11% a day before, according to data from CME Group.
But traders nevertheless still largely expect the Fed to cut rates at least twice this upcoming year. Whether they’re correct carries high stakes for financial markets. Lower interest rates can goose the economy and push up prices for investments, though they can also worsen inflation at the same time. And inflation has stubbornly remained above the Fed’s 2% target.
“Until the data provide a clearer direction, a divided Fed is likely to stay that way,” according to Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management. “Lower rates are likely coming this year, but the markets may have to be patient.”
The yield on the 10-year Treasury eased to 4.17% from 4.19% late Thursday. It tends to track expectations for longer-term economic growth and inflation.
The two-year Treasury yield, which more closely tracks forecasts for what the Fed will do with short-term interest rates in the near term, rose to 3.52% from 3.49%.
A separate report released Friday morning suggested sentiment among U.S. consumers is strengthening, particularly among lower-income households. Perhaps more importantly for the Fed, the preliminary report from the University of Michigan also said expectations for inflation in the coming 12 months may be at their lowest level in a year. That could prevent a vicious cycle where worsening expectations lead to behaviors that accelerate inflation further.
In stock markets abroad, indexes rose across much of Europe and Asia.
The French CAC 40 rose 1.3%, and Japan’s Nikkei 225 jumped 1.6% for two of the world’s bigger gains. In Tokyo, Fast Retailing, the fashion company behind Uniqlo, jumped 10.7% after its quarterly operating profit surged about 34% year-on-year. It revised its full-year forecasts upward.
—By Stan Choe, AP business writer
AP Business Writers Chan Ho-him and Matt Ott contributed.