U.S. stocks fell sharply Friday after a stronger-than-expected jobs report raised concerns about a slower pace of interest rate cuts in 2025.
At 09:35 ET (14:35 GMT), the Dow Jones Industrial Average fell 335 points, or 0.8%, S&P 500 dropped 50 points, or 0.8%, and NASDAQ Composite slipped 205 points, or 1.1%.
Wall Street indexes were nursing a choppy start to 2025, as hawkish signals from the Federal Reserve and uncertainty over President-elect Donald Trump’s policies weighed on risk appetite.
Nonfarm payrolls surprise to the upside.
The US economy unexpectedly added more jobs in December versus the prior month, according to a monthly report that could factor into how the Federal Reserve approaches possible interest rate cuts.
Nonfarm payrolls increased by 256,000 jobs last month after rising by a downwardly revised 212,000 in November, the Labor Department’s Bureau of Labor Statistics said. Economists had forecast an uptick of 164,000 roles.
The unemployment rate fell to 4.1%, below November’s pace of 4.2%.
Strength in the labour market is expected to give the Fed even more headroom to delay cutting interest rates this year. Fears of a labour market slowdown were one of the main motivations for the Fed cutting rates by 1% in 2024.
Q4 earnings season kicks off next week
The fourth-quarter earnings season is set to begin in earnest next week, with several major banks, including JPMorgan Chase (NYSE: JPM), Wells Fargo (NYSE: WFC), Goldman Sachs (NYSE: GS) and Citigroup (NYSE: C) set to report on Wednesday.
Elsewhere, Delta Air Lines (NYSE: DAL) stock soared over 5% after the carrier reported fourth-quarter earnings that surpassed analyst estimates, driven by strong travel demand.
Walgreens Boots Alliance (NASDAQ: WBA) stock rose 20% after the pharmacy retailer reported first-quarter earnings and revenue above analyst expectations, and delivered an upbeat annual forecast.
Crude set for another positive week
Oil prices rose Friday, on track for a third straight week of gains, with demand receiving a boost from severe winter conditions in parts of the United States and Europe.
By 09:35 ET, the US crude futures (WTI) climbed 5.2% to $77.73 a barrel, while the Brent contract rose 4.9% to $80.71 per barrel.
Both contracts are on course for gains around 4%, the third consecutive week of gains.
Many parts of the central and eastern United States are expected to experience below-average temperatures over the next few days, while many regions in Europe have also been hit by extreme cold, which is likely to increase demand for heating.
