S&P 500 hits record high after NFP report

Today’s headlines

What’s happening: US stocks climbed to all-time highs on Friday as investors responded to the latest jobs report.

What happened: Data released on Friday showed the nonfarm payrolls (NFP) rose lower than expected in December.

A surge in the shares of Broadcom and other chipmakers drove US stock indices higher.

Why it matters: All three major US stock indices recorded sharp gains on Friday, receiving a boost from industrials, materials and other stocks that had recently lagged tech stocks.

Stocks of chipmakers climbed steeply on Friday, taking the PHLX semiconductor index to a record high. Lam Research’s stock rose almost 9%, while shares of Broadcom, Alphabet and Tesla also provided a boost to the S&P 500 during the session.

Intel’s stock jumped almost 11% on Friday after US President Donald Trump referred to the meeting with CEO Lip-Bu Tan as “great.”

Nine of the major sectors on the S&P 500 closed the session higher, with materials and utilities stocks recording the strongest gains.

Data released on Friday showed that the US economy added 50,000 jobs in December, below the 56,000 job adds in the previous month. The figure also came in lower than market estimates of 60,000.

The US unemployment rate eased to 4.4% in December from 4.5% in November, which was the highest since October 2021. The latest reading was better than market estimates of 4.5%, which signalled that the labour market was not seeing a significant deterioration.

Average hourly earnings for all employees on private nonfarm payrolls surged by 0.3% to $37.02 in December compared to 0.2% growth in November.

Meanwhile, the University of Michigan’s consumer sentiment index rose for the second straight month to 54.0 in January, recording its strongest reading since September 2025. The figure also came in better than market estimates of 53.5.

The year-ahead inflation expectations, according to the University of Michigan, came in unchanged from the previous month at around a one-year low of 4.2% in January.

The Dow Jones index jumped 526.87 points, or 1.08%, to close at 49,504.07, while the S&P 500 surged 0.93% to settle at 6,966.28. The Nasdaq 100 gained 1.02% to 25,766.26 on Friday. Major indices also recorded gains last week, with the S&P 500 up 1.6% and the Dow Jones index adding 2.3%.

What to watch: Investors will keep an eye on the start of the first earnings season of 2026, looking for fresh insights into the economic condition in the US. News related to the ongoing US-Venezuela tensions will also remain in focus.

Data on inflation rate and new home sales from the US will be released on Tuesday. The annual core consumer price inflation rate, which declined to 2.6% in November, is expected to rise to 2.7% in December, while the annual inflation rate is expected to remain at 2.7% in December.

The markets today

The Canadian dollar in focus today ahead of building permits data

Context: The USD/CAD forex pair fell this morning as investors digested the latest jobs report from Canada.

Details: Data released on Friday showed that Canada’s employment rose slightly by 8,200 in December, following three straight monthly gains totalling 181,000 from September to November. The latest reading came in above market expectations of a slight decline in jobs. The recent gains were driven mainly by a surge in full-time work, while part-time employment declined last month.

Canada’s unemployment rate surged to 6.8% in December from 6.5% in November and came in above market estimates of 6.6%, while wage growth slowed to 3.7% year-over-year from 4% in the previous month.

Higher prices of crude oil, one of Canada’s major exports, provided a boost to the loonie this morning. Spot prices for WTI crude oil jumped more than 0.6% to trade at $59.02 per barrel.

Weakness in the US dollar also lent support to the Canadian currency. The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell around 0.2% to 98.97 this morning.

The USD/CAD pair fell around 0.2% to 1.3896 this morning.

What to watch: Investors await the release of economic data on building permits from Canada on Tuesday. Building permits in Canada, which jumped 14.9% to C$13.8 billion in October, recording the fastest growth since June 2024, are expected to decline by 6.8% in November.

Other Markets: European indices closed higher on Friday, with the FTSE 100, DAX 40, CAC 40 and STOXX Europe 600 Index up by 1.20%, 1.58%, 1.83% and 0.97%, respectively.

The news shaping the markets

Ukraine’s forces struck an oil depot in Russia’s southern Volgograd region over the weekend. The news sent the USD/RUB pair higher in forex trading this morning.

Saudi Arabia’s industrial production surged by 10.4% year-over-year in November. This being an acceleration from October’s 8.9% growth exerted some pressure on the USD/SAR forex pair.

Australia’s ANZ-Indeed job ads declined 0.5% in November, lower than the previous month’s 1.5% plunge, which sent the AUD/USD pair higher in forex trading this morning.

Mexico’s production of cars surged 8.5% annually to 243,961 units in December, recovering from the 8.4% decline in November, which exerted pressure on the USD/MXN forex pair.

Brazil’s annual inflation rate slowed to 4.26% in December from 4.46% in the previous month. The region’s inflation falling to the lowest level since August 2024 sent the USD/BRL pair lower in forex trading this morning.

What else to watch today

Germany’s current account (1745 UAE Time), India’s inflation rate (1430 UAE Time) as well as US quarterly grain stocks – corn (2100 UAE Time), soy (2100 UAE Time), and wheat (2100 UAE Time).