Wall Street Hits Records as Jobs Report Alters Rate-Cut Outlook
U.S. stocks reached record highs after a mixed December jobs report lowered hiring, improved unemployment, and adjusted expectations for Federal Reserve interest-rate potential cuts.
Overview
S&P 500, Dow and Nasdaq hit record highs after the December jobs report; S&P rose 0.6% to 6,966.28, Dow added 237.96 points to 49,504.07.
December hiring was weaker than expected, but the unemployment rate improved, prompting traders to lower odds of a near-term Fed rate cut to roughly 5%.
Vistra jumped 10.5% after a 20-year power deal with Meta; Oklo rose 7.9% with its Meta agreement; GM fell 2.7% after reporting $6 billion EV-related charges.
Homebuilders and suppliers rallied after President Donald Trump proposed $200 billion in mortgage bond purchases aimed at lowering mortgage rates, lifting names like Lennar, D.R. Horton and Builders FirstSource.
Smaller stocks outperformed this week, Russell 2000 up; Treasury yields were mixed while consumer sentiment rose and one inflation expectation gauge eased, potentially supporting future Fed cuts.
Analysis
Center-leaning sources present this coverage neutrally: they prioritize factual market data (record S&P/Dow, Treasury yields), attribute interpretations to named entities (Labor Department, Morgan Stanley’s Ellen Zentner), include contrasting indicators (weaker hiring but lower unemployment), and separate source quotes from narrative — e.g., corporate deals, Trump mortgage proposal, and firm earnings.
Sources (3)
FAQ
The weaker-than-expected December hiring report, combined with an improved unemployment rate, led traders to sharply reduce the probability of an imminent Federal Reserve rate cut, with near-term odds falling to roughly 5%, signaling expectations that the Fed will wait longer before easing policy.
Stocks rose to record highs because investors saw the mixed jobs report as evidence that the economy is cooling without collapsing, which could keep inflation in check and support the case for future, gradual Fed rate cuts, a backdrop that tends to be supportive for equities.
Homebuilder and building-supplier stocks rallied after President Trump proposed $200 billion in mortgage bond purchases aimed at lowering mortgage rates, lifting companies such as Lennar, D.R. Horton, and Builders FirstSource as investors anticipated stronger housing demand.
Vistra’s stock jumped after it announced a 20-year power supply deal with Meta, and Oklo shares rose on news of its own agreement with Meta, as investors viewed the long-term contracts with a major technology company as strong revenue-visibility catalysts for both energy firms.
Mixed Treasury yields alongside rising consumer sentiment and easing inflation expectations suggest that investors see lower inflation risks and a reasonable chance of future Fed cuts, while still weighing uncertainty about growth, contributing to a cautiously optimistic economic outlook.
History
This story does not have any previous versions.