Ask any trader and they’ll tell you markets don’t like two-way bets. On Friday that was the mood: futures barely budged while investors waited for December’s jobs report and a potentially market-moving Supreme Court ruling on President Trump’s sweeping tariffs.
The calm felt deliberate. After a week when small caps led some early gains and technology stocks cooled, Wall Street hit pause — not from boredom but because the map could change quickly. Economists surveyed by Bloomberg were looking for roughly 70,000 payrolls and a modest dip in the unemployment rate to 4.5%. With the Fed eyeing data ahead of its next meeting, a weaker print could ease rate worries; a stronger one would complicate policy expectations.
Two headlines, two directions
The Supreme Court decision on the so-called "Liberation Day" tariffs is the other wild card. At issue is whether the president properly used emergency trade powers to impose broad duties — a legal question with big economic consequences. If the Court rules the levies unlawful, tariffs could be rolled back or face stricter limits, reshaping trade flows and corporate planning. If it upholds them, analysts warn importers and multinationals may have to quickly reprice risk and costs.
Energy and geopolitics added texture. Oil ticked higher — U.S. crude around $58 and Brent near $62 — after tensions around Venezuela and moves that tightened near-term supply sentiment. That helped lift some commodity and energy names even as broader indexes treaded water.
Defense, chips and the AI angle
Politics also pushed pockets of the market upward. President Trump’s talk of boosting defense spending drove a rally in military contractors, with L3Harris, Lockheed Martin and Northrop Grumman posting notable gains as investors priced in bigger budgets for equipment and modernization.
At the same time, the tech side of the market was monitoring semiconductor supply and AI spend. Taiwan Semiconductor Manufacturing Co. reported fourth-quarter revenue that topped forecasts, up about 20% from a year earlier — a signal that demand for high-end chips is still robust. That dynamic links back to big tech moves: companies are investing heavily in AI models and infrastructure, pushing demand for specialized silicon. Observers point to industry developments like Microsoft's MAI-Image-1 and initiatives around large language and multimodal models as part of why chipmakers are back in focus.
Apple’s plan to lean on a custom Google Gemini model to power future Siri capabilities underscores the same theme: software ambitions are feeding hardware demand. That kind of stack — models, cloud, and chips — matters for TSMC and its peers and helps explain why investors watch quarterly reports from chipmakers so closely. See more on Apple and Gemini in context at Apple's move to use a custom Gemini model.
On the fringes of tech, Elon Musk’s xAI reported large quarterly losses and heavy cash burn, a reminder that startups chasing the AI frontier are still spending big before profits follow.
What investors are doing now
Traders typically do three things when two big catalysts collide: they pare risk, hunt for sector-specific opportunities, and await clarity. This week the S&P 500 was up about 1% while the Dow and Nasdaq posted slightly larger gains for the week — not runaway optimism, more a cautious optimism. Volatility was muted in futures trading even as headlines could produce abrupt moves.
For market participants the micro matters: bond yields, unemployment claims, and sector-level earnings will all affect how the next trading day unfolds. A surprisingly soft payrolls number could lift rate-sensitive stocks and tighten the path for the Fed. A protracted legal win or loss on tariffs could prompt reassessments across industries that rely on global supply chains.
Expect trading to get livelier once both the jobs print and the Court’s opinion land. Until then, the market’s breath remains held, traders watching for whichever headline writes the next chapter.