US equities edged higher on Friday, as December’s payrolls report did little to change the outlook for leaving interest rates on hold. Traders remain on alert for a possible Supreme Court ruling on whether President Donald Trump’s tariffs are legal.
The S&P 500 Index advanced 0.3% as of 9:37 a.m. in New York, while the technology-heavy Nasdaq 100 Index was up 0.2%. The Dow Jones Industrial Average rose 0.3%.
US employers added fewer jobs than expected in December, suggesting the labor market continued to soften at year-end, data released earlier in the day showed. The report supported expectations that the Federal Reserve will hold rates steady at their January meeting but left the door open for cuts later in the year.
“The labor data today signals more balance than weakness in the labor market,” said Cayla Seder, macro multi-asset strategist at State Street. “This number is strong enough that it signals the economy is okay, but isn’t so strong that the market needs to drastically change their monetary policy expectations, which is a tailwind for equities.”
Nonfarm payrolls increased by 50,000 last month after downward revisions to the prior two months, according to the Bureau of Labor Statistics. The unemployment rate edged down to 4.4%, settling back after the record-long government shutdown.
Tariff Ruling
An upcoming Supreme Court ruling on the legality of the sweeping tariffs that President Trump rolled out in April, briefly sending shockwaves through markets, looms as one of the next big tests for US stocks and bonds.
A ruling striking down the tariffs would likely give a boost to stocks by promising to improve profit margins and remove a burden on consumers. At the same time, Treasuries may come under pressure as that potential stimulus complicates the outlook for the Fed’s rate-cut path and threatens to worsen the government’s budget deficit.
Meanwhile, shares of mortgage stocks soared on Friday after the president said on his social media platform that he was directing the purchase of $200 billion in mortgage bonds. Companies including LoanDepot Inc., Rocket Cos Inc., and Opendoor Technologies Inc. were among the gainers.
For skeptics questioning how much further US stocks can climb after a blockbuster run, one of the market’s dominant forces remains decisively bullish: individual investors.
Retail traders have extended a buying spree into the new year, following a record-setting performance in 2025, an analysis from JPMorgan Securities’ Arun Jain shows. That confidence has helped stabilize markets during recent pullbacks. Considering the group’s growing influence on Wall Street, if retail traders keep snapping up equities, gains in the US stock market are likely to persist.
On the corporate side, Meta Platforms Inc. agreed to a series of electricity deals to power data centers that will make it the biggest buyer of nuclear power among its hyperscaler peers. US-listed shares of Taiwan Semiconductor Manufacturing Co are up after the company reported strong December sales. Qualcomm Inc. shares are down after Mizuho Securities downgraded the chipmaker to neutral from outperform.
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