A patchwork jobs report and the prospect of a Supreme Court decision on President Trump’s tariffs nudged U.S. stocks into modest gains Friday, as traders weighed softer payroll growth against a falling unemployment rate and a fresh round of policy uncertainty.
The headline: nonfarm payrolls rose by about 50,000 in December — well under economists’ expectations — while the unemployment rate slipped to 4.4%. Markets interpreted the data as a signal the economy is still grinding forward but not powering ahead, and the major indexes moved upward: the S&P 500 and Nasdaq each added roughly 0.4% and the Dow climbed about 170 points.
What traders are parsing
There’s a tug-of-war in the numbers. Slower job creation suggests less upward pressure on inflation, which reduces near-term odds of a Fed rate cut being pulled forward. Yet the drop in the jobless rate means the labor market isn’t collapsing either. Investors took the mixed reading as reason to keep the Fed on the sidelines for now, while remaining alert for signs the labor market is finally weakening.
Longer-dated yields rose modestly after the release, and short-term rate-cut expectations for January faded. That shift shows how finely tuned market pricing is to incremental data: a few tens of thousands of jobs can move odds noticeably.
Tariffs, restocking and corporate behavior
Beyond the data, markets are holding their breath for a possible Supreme Court ruling on the legality of the tariffs — a decision that could influence trade costs, corporate inventories and the broader manufacturing cycle. Many companies have been reluctant to begin large-scale restocking until they know whether tariff duties will stand. If the high court rules against the administration, it could remove a layer of uncertainty that’s been suppressing purchasing and supply-chain decisions.
At the same time, President Trump’s claim that he’s instructing his representatives to buy $200 billion in mortgage bonds drew scrutiny: it’s an unconventional policy pronouncement with unclear mechanics and no immediate implementation path. That kind of headline-driven uncertainty has become a regular market input.
Tech, chips and AI still in focus
Semiconductor and AI-related names got a lift after public attention on chipmakers increased this week — part policy, part corporate narratives. Intel’s recent interaction with the White House and executives’ meetings have helped chip stocks out of a recent funk. Broader investor appetite for AI exposure remains an undercurrent: developments in model and tooling launches continue to shape sentiment around software and hardware suppliers. (See coverage of Microsoft's MAI-Image-1 model and the industry moves around AI tooling like Google’s AI Mode.)
There were also idiosyncratic movers in premarket trading — everything from nuclear power firms landing commercial deals to analysts upgrading industrial names — reminding investors that macro headlines and single-company catalysts can both matter on any given day.
Market strategists cautioned that until data flow becomes clearer, investors may see choppy trading. Some see the mixed jobs reading as a reason to stay patient; others warn that “yellow warning lights” are flashing for the economy even if recession alarms aren’t sounding yet.
This week’s mix of economic data, court decisions and off-the-cuff policy statements underscores how markets today move on both numbers and narrative — and how quickly the balance can swing as new information arrives. For now, traders are pricing in a steady Fed, watching tariff risk, and keeping an eye on the next round of economic releases and legal pronouncements that could sharpen the picture.