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Stocks Hit Record Highs as Jobs Data Supports Fed Rate Cut Outlook

Stocks Hit Record Highs as Jobs Data Supports Fed Rate Cut Outlook. Source: Tim Evanson, CC BY-SA 2.0, via Wikimedia Commons

Global stock markets surged to fresh record highs on Friday as investors reacted positively to a U.S. jobs report that showed slower-than-expected employment growth in December, reinforcing expectations that the Federal Reserve will cut interest rates later this year. Major U.S. stock indexes and European shares closed at historic levels, while the U.S. dollar and short-term Treasury yields also moved higher.

Data from the U.S. Bureau of Labor Statistics showed nonfarm payrolls increased by 50,000 in December, slightly below economists’ expectations of 60,000 and close to November’s revised gain of 56,000. The unemployment rate edged down to 4.4%, matching forecasts. While job growth softened, investors viewed the report as evidence of a cooling but resilient U.S. economy, easing concerns about aggressive monetary tightening.

Wall Street posted strong gains, with the Dow Jones Industrial Average rising 0.48% to 49,504.07, the S&P 500 advancing 0.65% to 6,966.28, and the Nasdaq Composite climbing 0.82% to 23,671.35. Chip stocks led the rally, highlighted by Intel’s 10.8% surge after U.S. President Donald Trump said he had a “great meeting” with CEO Lip-Bu Tan. Broadcom also gained 3.8%, boosting overall market sentiment. All three major indexes ended the first full trading week of 2026 higher, supported by gains in materials, industrials, and other non-tech sectors.

European markets also rallied, with the STOXX 600 rising 0.97% to a record close, driven partly by a jump in Glencore shares. MSCI’s global equity index climbed 0.53% to a new intraday high, reflecting broad-based optimism across regions.

In currency markets, the dollar index rose 0.26% to 99.13. Two-year U.S. Treasury yields, closely tied to Federal Reserve policy expectations, increased to 3.538%, while 10-year yields edged slightly lower. Commodity prices strengthened as well, with Brent crude and WTI oil gaining more than 2%, copper extending recent gains, and aluminum reaching its highest level since April 2022.

Despite ongoing geopolitical tensions and uncertainty around Trump’s tariffs ahead of a possible Supreme Court ruling, investors remained focused on economic data and the outlook for interest rate cuts, driving risk appetite and lifting global markets.

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