NEW YORK, Jan 9, 2026, 18:38 EST
The S&P 500 closed at a record on Friday as Broadcom and other chip stocks kept Wall Street climbing after a softer-than-expected U.S. jobs report. The index rose 0.65% to 6,966.28, while the Nasdaq gained 0.82% to 23,671.35 and the Dow added 0.48% to 49,504.07; the PHLX semiconductor index, which tracks major chipmakers, jumped 2.7% to a record. “On the overall AI theme, investors are getting granular,” said Zachary Hill at Horizon Investments, as Lam Research surged after Mizuho lifted its price target and Vistra rallied on a power deal with Meta. (Reuters)
The labor data mattered because it set the tone for the next Fed meeting and for how traders price rate cuts in 2026. Nonfarm payrolls — jobs outside farming — rose by 50,000 in December, below economists’ forecast of 60,000, after a downwardly revised 56,000 in November. The unemployment rate dipped to 4.4% and wages rose 3.8% from a year earlier, and “all roads lead to the unemployment rate … it should douse the Fed’s recent urgency,” Fitch Ratings’ Olu Sonola said. (Reuters)
Interest-rate futures now lean toward the Fed staying put for months, after the central bank cut its benchmark overnight rate by three-quarters of a percentage point last year. Traders see a 44% chance of a cut by April and have shifted toward June as a more likely point for the next move, Reuters reported. Richmond Fed President Thomas Barkin told reporters companies are in a “low-hire” environment, pointing to uncertainty and higher productivity. (Reuters)
Bond traders braced for volatility on Friday, watching the jobs report and the Supreme Court’s looming decision on Trump’s tariffs. (Bloomberg)
In markets after the data, the dollar index rose 0.26% to 99.13, while the two-year Treasury yield — which tends to track Fed expectations — climbed five basis points to 3.538% as the 10-year yield slipped to 4.171%. “We are back to normal in terms of economic reporting,” Tim Ghriskey at Ingalls & Snyder said, after a long federal government shutdown delayed U.S. statistics. The Supreme Court is expected to issue its next rulings on Jan. 14, Reuters reported. (Reuters)
Housing-linked stocks also ran higher after Trump ordered $200 billion in purchases of mortgage bonds — securities backed by home loans — in a bid to lower mortgage rates and monthly payments, according to his Truth Social post. FHFA Director Bill Pulte said Fannie Mae and Freddie Mac will execute the buying, while TD Cowen said it could narrow the gap between 30-year mortgage rates and 10-year Treasury yields. “Every little bit will help push mortgage yields lower, but this might be self-defeating,” said Brian Jacobsen, chief economic strategist at Annex Wealth Management. (Reuters)
The tariff case is the other live wire. The Supreme Court is weighing whether Trump can use the International Emergency Economic Powers Act — a law meant for emergencies — to impose tariffs without Congress. Some investors see upside if tariffs get rolled back and importers receive $150 billion to $200 billion in refunds, but KEY Advisors’ Eddie Ghabour warned that kind of fiscal hit would “suck liquidity out of the system,” while JPMorgan estimated annualized tariff revenue could fall to about $250 billion from roughly $350 billion if the administration pivots to other legal routes. (Reuters)
The next test is corporate earnings and inflation data. JPMorgan is due Tuesday as banks kick off fourth-quarter results, and December CPI inflation could shape the Fed debate. Analysts expect S&P 500 profits to have risen 13% in 2025 and to grow more than 15% in 2026, according to LSEG IBES, even as Michael Arone at State Street warned the market “seems a little too quiet” given events ahead. (Reuters)
But the downside scenario is plain: inflation stays sticky and the Fed stays on hold longer than markets want. Atlanta Fed President Raphael Bostic said “inflation is still too high” and urged policy makers to stay laser-focused on prices, even as he described a job market in low-hire, no-fire mode. He also noted housing affordability problems go beyond financing — a reminder that cheaper mortgages alone may not fix a supply squeeze. (Reuters)
