LONDON, Jan 9 : Global shares rallied and the dollar pared gains on Friday after data showed the U.S. economy created fewer jobs than expected in December, which could reinforce the case for more Federal Reserve rate cuts this year.
The Bureau of Labor Statistics monthly report showed 50,000 workers were added to nonfarm payrolls in December, compared with expectations in a Reuters poll for a rise of 60,000, just above November’s downwardly revised increase of 56,000. The unemployment rate eased, as expected, to 4.4 per cent.
U.S. stock futures rose 0.3-0.4 per cent, building on earlier gains. The S&P 500 .SPX ended flat on Thursday, although an aerospace and defence index rose to an all-time high, with European defence shares also hitting a new high.
Europe’s STOXX 600 was last up 0.9 per cent, from a gain of 0.64 per cent earlier.
“Friday’s weaker-than-expected jobs report showed that hiring continued to slow towards the end of 2025, capping a tough year for the labour market,” Dennis Follmer, chief investment officer at Montis Financial, in Massachusetts, which manages $1.3 billion, said.
“With a growing economy and the Fed still in rate-cutting mode, the AI boom likely still has some legs for 2026, but there are increasing signs that it is getting late at what has been a great party and some guests are getting a bit carried away,” he said.
DOLLAR RETREATS SLIGHTLY
The dollar gave up almost all the day’s gains versus a basket of major currencies, having risen by nearly 0.2 per cent earlier. The euro was flat at $1.1647 from $1.1641 earlier, while the Japanese yen strengthened a touch to 157.52, leaving the dollar up 0.42 per cent on the day, compared with 157.595 before the jobs report.
Markets show traders still expect two rate cuts by the end of this year, meaning the payrolls report did not change that view.
Gold, which tends to perform well in an environment of falling U.S. rates, given that it bears no yield, was up 0.2 per cent on the day at $4,485 an ounce, compared with a 0.14 per cent daily loss earlier.
U.S. two-year Treasury yields were up 2.5 basis points at 3.513 per cent, unchanged from levels before the employment numbers, while yields on the benchmark 10-year Treasury note dipped to 4.179 per cent, steady on the day, from around 4.191 per cent earlier on.
SUPREME COURT RULING IMMINENT
Later on Friday, the U.S. Supreme Court may rule on the legality of President Donald Trump’s tariffs.
Some investors believe stocks could bounce if the court rolls back existing tariffs, especially for companies that had to absorb high-import costs.
“A constraint may be that even if the tariffs are ruled unlawful, the Trump administration is unlikely to roll over and will look to other ways to maintain the levies,” Kyle Rodda, senior financial markets analyst at Capital.com, said.
In commodities, crude oil held on to its gains. Brent futures were up 0.6 per cent on the day at $62.36 a barrel, set for a roughly 3 per cent gain this week, as investors have become more convinced that production in Venezuela, even under U.S. control, may not rise meaningfully for some time.
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