US markets closed at record levels on Friday, buoyed by a softer-than-expected jobs report that reinforced confidence in a steady economic expansion. The S&P 500 rose 0.65% on Friday to 6,966.28, marking a fresh record close and a new intraday high during the session. The Nasdaq Composite added 0.81% to 23,671.35, while the Dow Jones Industrial Average gained 238 points, or 0.48%, to finish at 49,504.07, also a record close.
All three major indices posted solid weekly gains. The S&P 500 rose more than 1% over the week, the Dow advanced 2.3%, and the Nasdaq gained 1.9%, extending a strong start to the year for US equities.
Jobs report eases growth fears without raising alarm
The December jobs report showed nonfarm payrolls increasing by 50,000, undershooting expectations for a 73,000 rise. While the headline number was weaker than forecast, it did little to unsettle markets. Investors viewed the data as consistent with an economy that is slowing modestly but not stalling.
The unemployment rate edged down to 4.4%, compared with expectations of 4.5%, reinforcing the view that labour market conditions remain relatively tight. Taken together with recent JOLTS and ADP data, the latest figures point to a labour market that has softened from earlier strength but is still holding firm, characterised by subdued hiring and limited layoffs.
Importantly, December’s release was the first employment report in several months unaffected by disruptions from the US government shutdown, giving investors greater confidence in the reliability of the data. The numbers were seen as reducing pressure on the Federal Reserve to cut interest rates in the near term.
Housing stocks rally on mortgage bond support
US homebuilders outperformed on Friday after President Donald Trump directed representatives to purchase mortgage-backed securities in an effort to push borrowing costs lower for homebuyers. Shares in D.R. Horton, PulteGroup, and Lennar all surged, posting gains of more than 7%. Home improvement stocks also benefited, with Home Depot closing higher.
Australian outlook lifted by Wall Street strength
Australian shares are set to open slightly higher on Monday, tracking the strong lead from Wall Street. Futures point to the S&P/ASX 200 rising 29 points, or 0.3%, to 8,714 at the open.
Attention locally is turning to household spending data for November, due later in the day. Economists expect spending growth to slow sharply from October’s strong 1.3% increase, with forecasts ranging from a modest 0.1% to 0.6% rise. Softer consumption would ease inflation pressures and may influence expectations for the Reserve Bank of Australia’s next policy move, even as rate hike risks remain part of the outlook.
