By Alex Financials

1. U.S. Stocks Rally After Softer Jobs Data and Early Gains

U.S. stock markets moved higher on Friday as traders digested a weaker-than-expected December jobs report, which boosted optimism that inflation pressures could ease and put rate cuts back on the table for 2026. The Labor Department reported that nonfarm payrolls rose by only 50,000 versus expectations for about 60,000, while the unemployment rate ticked slightly lower — a mix that signals a slowing labor market without overt weakness. Major U.S. indices — including the Dow, S&P 500, and Nasdaq — traded up on the session and were positioned for strong weekly gains. Investors now anticipate commentary from the Fed and a crucial Supreme Court ruling on tariff legality that could add volatility ahead.

Notable stock moves today:

• Utilities and energy stocks like Constellation Energy ($CEG) and Entergy ($ETR) traded higher on renewed analyst interest.

• Intel ($INTC) gained after meeting with administration officials.

• Mortgage-related names such as LoanDepot ($LDI) and Opendoor ($OPEN) advanced after announcements regarding a large purchase of mortgage bonds.

• General Motors ($GM) was weaker after reporting a large EV investment charge.

What this means:
Softer job creation often increases odds of Fed accommodation — at least in market pricing — since persistent employment strength has been the key argument against cutting rates. This may fuel gains in rate-sensitive sectors if traders believe further easing lies ahead.

2. Global Stocks Join the Rally, Europe Hits Records

U.S. gains weren’t isolated: European stocks also extended their positive streak. The STOXX 600 climbed as miners and energy firms led advances following deal talk and mixed macro data. Glencore ($GLEN) surged on reports of early merger discussions with Rio Tinto ($RIO) — a tie-up that would create one of the largest mining entities globally. Chip and tech names such as ASML ($ASML) and STMicroelectronics ($STM) also contributed to the broader rally.

Investors remained cautious about global growth and geopolitical risks (especially related to Venezuela and tariff policy uncertainty), but record or near-record levels in major European indices reflected resilient risk appetite.

3. U.S. Market Leadership Shifts: Cyclicals and Utilities Take the Lead

While AI and large cap tech had dominated for years, today’s trading showed evidence of sector rotation:

• Energy and utility stocks outperformed as investors balanced growth with defensive positioning.

• Defense and industrials also saw interest as government budget proposals hinted at increased military spending in coming years.

• Some growth-oriented technology names were subdued in early trade as valuations remain in focus and traders watch Fed policy closely.

This type of leadership shift — away from solely high-growth tech and toward cyclicals, infrastructure, and utilities — is typical in environments where markets are questioning the timing of rate changes and looking for earnings stability.

4. Earnings & Corporate Catalysts to Watch

Earnings season rolls on, and several companies reporting today could add fresh direction to markets:

• A roster of firms — both large and small — is scheduled to report before and after the bell, potentially influencing sector sentiment and individual stock performance. Action from defensive names and growth sectors alike may offer new catalysts for sector rotation or confirm current trends.

Additionally, corporate headlines involving big infrastructure deals or merger speculation — such as the mining talks in Europe — often flow into equity market behavior over the trading week.

5. Macro Themes Driving Markets: Tariffs, Interest Rates & Geopolitics

Investment sentiment continues to be shaped by three major macro themes:

Tariff Policy

A pending Supreme Court decision on the legality of global tariffs is a key event risk this week. A ruling striking down tariff authority could send shockwaves through sectors sensitive to trade costs and supply chains.

Interest Rates

Even with soft jobs data, markets largely agree that the Federal Reserve is unlikely to enact major cuts immediately — but the probability of easing later this year rose. This balance between caution and easing hopes is keeping yields and equities tethered.

Geopolitical Tensions

Concerns about geopolitical disruptions, particularly in energy markets (e.g., Venezuela), continue to underpin oil prices and energy stocks globally as supply fears spur elevated risk premiums.

Key Takeaways for Investors Today

• Market Tone: Bullish with caution — broad indices higher but with mixed sector participation.

• Fed Outlook: Softer employment data increases odds of future rate cuts, but timing remains uncertain.

• Sector Trends: Rotation toward cyclical, energy, defense, and utilities from pure growth names.

• Macro Risks: Trade policy and geopolitics remain key catalysts that could accelerate volatility.