4:11pm: Stocks slump
The three major indexes posted steep losses for Friday’s session as investors digested the final jobs report of last year.
The Dow Jones fell by 1.6% or 700 points to 41,938 points, the Nasdaq shed 1.6% at 19,161 points and the S&P 500 fell 1.5% to 5,827 points.
3:20pm: "Gangbusters" jobs report: BofA
Is the Fed's cutting cycle finished after today's job's report?
"Given a resilient labor market, we now think the Fed cutting cycle is over," Bank of America analysts commented.
"Inflation is stuck above target and risks are skewed to the upside. Economic activity is robust. We see little reason for additional easing. The conversation should move to hikes, which could be in play if y/y core PCE exceeds 3% and long-run inflation expectations de-anchor."
2:25pm: TikTok ban appears likely
The Supreme Court appears poised to uphold a ban on TikTok tied to concerns about its Chinese ownership, as justices largely framed the issue as one of national security rather than First Amendment rights.
During oral arguments Friday, the sell-or-ban law, requiring TikTok’s parent company ByteDance to divest from the app or face operational restrictions in the U.S., was defended as a measure against foreign control rather than a restriction on speech.
Chief Justice John Roberts emphasized that the law targeted data security risks, not the content on TikTok, and questioned the applicability of First Amendment protections in this case.
A decision on whether to delay the law’s January 19 implementation is expected soon, though broader constitutional questions remain unresolved.
1:10pm: Walgreens, Constellation Brands move in opposite directions
A couple of notable movers on Friday afternoon:
Walgreens Boots Alliance Inc (NASDAQ:WBA, ETR:W8A) saw its shares surge 24% in Friday morning trading after reporting stronger-than-expected first-quarter earnings and maintaining an optimistic full-year forecast.
For Q1 FY25, Walgreens posted adjusted earnings per share (EPS) of $0.51, beating analysts' revised expectations of $0.37.
Revenue rose 7.5% year-over-year to $39.46 billion, surpassing the consensus estimate of $37.28 billion.
On the flipside, Constellation Brands shares plummeted 13% on Friday morning after the US drinks maker cut its growth outlook for the second time this fiscal year.
The company reported weaker-than-expected Q3 earnings, citing sluggish consumer demand for its beer and wine products.
12:26pm: Wall Street in the red
Stocks remained in negative territory as stronger-than-forecast US jobs growth squashed investors' rate cut hopes.
"It's a case of good news being interpreted as bad news again as stronger-than-expected US employment data leads to stock index rout,” IG senior technical analyst Axel Rudolph said.
The Nasdaq was down 2.15, the S&P 500 shed 1.8% and the Dow Jones 1.7%.
Oil prices, meanwhile, ticked higher amid concerns US sanctions might disrupt Russian oil supplies. “US natural gas prices rose by over 5%, close to their 2-year high, driven by colder weather forecasts and increased heating demand,” Rudolph said.
11:10am: Labor market highs and lows
The US labor market ended 2024 on a high note, with nonfarm payrolls increasing by 256,000 in December, significantly surpassing the consensus forecast of 165,000.
Revised data for October and November shaved a modest 8,000 off earlier estimates, leaving payroll growth over the past three months at an average of 170,000—a moderate pace that aligns with an annual average of 186,000 for the year.
Bill Adams, chief economist at Comerica, highlighted the labor market’s resilience, noting that while the unemployment rate is no longer at historic lows, it still reflects a robust environment where most Americans seeking work can find it. “Wage growth is solid and has outpaced inflation for a year and a half,” Adams said.
However, he pointed out a soft spot in hiring trends. Gross hiring rates, a key measure of labor market dynamism, have slowed to levels last seen during the early stages of the post-2008 recovery.
On a brighter note, leading indicators such as job openings and temporary employment suggest a recovery in hiring may be on the horizon in 2025.
9.47am: Wall Street tumbles on dashed rate cut hopes
Wall Street got off to a poor start on Friday after expectation-beating non-farm payroll figures hampered hopes around interest rate cuts ahead.
The Nasdaq sank 1.3% as trading got underway as a result, while the S&P 500 fell 1.0% and the Dow Jones dropped 0.8%.
US Bureau of Labor Statistics showed non-farm payrolls climbed by 256,000 in December, against the 153,000 anticipated, as unemployment unexpectedly fell from 4.2% to 4.1%.
Money markets scaled back Federal Reserve interest rate cut expectations as a result and forecast just one just for 2025.
“This solid payroll data highlights the current US economic strength,” Evelyn Partners investment strategist Nathaniel Casey commented.
“However, this strength is likely to put the brakes on the Fed’s cutting cycle, with markets now expecting the bank to hold tight on any more cuts for at least the first half of the year.”
8.38am: Non-farm payrolls trounce expectations
The US economy added over 100,000 more jobs than expected in December, while unemployment receded, figures showed on Friday.
According to the US Bureau of Labor Statistics, non-farm payrolls climbed by 256,000 over the month, while the unemployment rate fell from 4.2% to 4.1%.
Markets had been expecting the addition of 153,000 jobs in December and for unemployment to remain flat at 4.2%.
“Employment trended up in health care, government, and social assistance. Retail trade added jobs in December, following a job loss in November,” the report said.
Focus had been on the figures given jitters around the Federal Reserve’s stance on cutting interest rates ahead.
Futures showed Wall Street falling into the red after the figures, with the Nasdaq, S&P 500 and Dow Jones seen 0.4%, 0.3% and 0.1% lower respectively.
6.54am: Mixed start seen on Wall Street
Wall Street appeared in a cautious mood ahead of Friday’s opening bell and key job market figures later in the day.
Futures had the Nasdaq and S&P 500 each down 0.1% before the open, while the Dow Jones was seen just above the mark.
Non-farm payroll figures for December were set to be the focus on Friday, especially given jitters over Federal Reserve policy and market direction ahead.
According to analysts, the US economy is expected to have added 153,000 jobs over the course of December, against 227,000 in November.
Unemployment, for which data is also due on Friday, is expected to have remained flat at 4.2% in the meantime.
“The Fed is now less worried about negative risks to the labour market,” Tickmill Group partner Patrick Munnelly said, “other employment data supports this perspective”.
“This situation raises the threshold for the Fed to revert to a more dovish stance. Currently, there is little urgency to prolong the rate cut cycle.”