Stock Market Update

[BRIEFING.COM] The first half of today's session has seen stocks advance in broad fashion, pushing the S&P 500 (+0.6%) to a fresh all-time high while the Nasdaq Composite (+0.8%) and DJIA (+0.4%) hold similar gains. 

Nine S&P 500 sectors trade higher, with cyclical, growth, and defensive sectors all posting solid gains. The December Employment Situation Report showed nonfarm payrolls rising by 50,000 and the unemployment rate edging down to 4.4% from 4.5%. While the data effectively removed any chance of a January rate cut, the still-low unemployment rate may help temper concerns about a labor-market-driven slowdown in consumer spending and economic activity.

Cyclical stocks are continuing their impressive rally as a result, with rising oil and precious metals prices contributing to today's strength. 

This morning's data also contributed to a sharp rise in homebuilder names as the October Housing Starts report (-4.6%) showed single-unit starts up 5.4% month-over-month and at their highest level since July.  Notably, President Trump has instructed Fannie Mae (FNMA 10.99, +0.14, +1.29%) and Freddie Mac (FMCC 10.24, +0.10, +0.99%) to purchase $200 billion in mortgage bonds, reinforcing expectations for increased mortgage-market support.

The iShares U.S. Home Construction ETF is up 5.4% as names such as Lennar (LEN 117.51, +7.96, +7.27%) and D.R. Horton (DHI 155.12, +9.22, +6.32%) dot the top of the standings in the consumer discretionary sector (+0.8%). 

The top-weighted information technology sector (+0.8%) also holds a solid gain, supported by a rebound in chipmaker names that sends the PHLX Semiconductor Index 2.7% higher. Sandisk (SNDK 371.43, +36.89, +11.03%) is one of the top movers in the S&P 500 after Tom's Hardware reported the company plans a sharp increase in enterprise SSD pricing in early 2026 as AI demand grows. 

After some early shakiness, the mega-caps have also found their footing, with the Vanguard Mega Cap Growth ETF up 0.6%. 

The utilities sector (+1.7%) holds the widest gain, supported by strength in Vistra Corp. (VST 168.69, +18.09, +12.01%) after the company announced a 20-year agreement to power Meta Platforms (META 652.56, +6.50, +1.01%) operations.

Meanwhile, only the financials (-0.2%) and health care (-0.1%) sectors fail to post gains at this juncture. 

Outside of the S&P 500, the Russell 2000 (+1.2%) and S&P Mid Cap 400 (+0.9%) continue to outperform as early macro indicators support a favorable backdrop for growth-oriented stocks this year.

Today's strength adds to a solid rally in stocks from early this week before two consecutive mixed finishes. The broader macro backdrop continues to be supportive, keeping the major averages at record high levels heading into earnings season. 

Reviewing today's data:

• December Nonfarm Payrolls 50K (Briefing.com consensus 55K); Prior was revised to 56K from 64K, December Nonfarm Private Payrolls 37K (Briefing.com consensus 50K); Prior was revised to 50K from 69K, December Unemployment Rate 4.4% (Briefing.com consensus 4.5%); Prior was revised to 4.5% from 4.6%, December Average Hourly Earnings 0.3% (Briefing.com consensus 0.3%); Prior was revised to 0.2% from 0.1%, December Average Workweek 34.2 (Briefing.com consensus 34.3); Prior 34.3
  • Granted, the employment situation could be better, but the key takeaway is that the low unemployment rate will temper concerns that consumer spending and the economy will slow rapidly due to a weak labor market. It will also likely keep the Fed's next rate cut at bay.
• September Housing Starts 1.306 mln (Briefing.com consensus 1.320 mln); Prior was revised to 1.291 mln from 1.307 mln, September Building Permits 1.415 mln (Briefing.com consensus 1.340 mln); Prior was revised to 1.330 mln from 1.312 mln
• October Housing Starts 1.246 mln (Briefing.com consensus 1.340 mln); Prior 1.306 mln, October Building Permits 1.412 mln (Briefing.com consensus 1.355 mln); Prior 1.415 mln
  • The key takeaway from the report is that the weakness in starts was driven entirely by multi-family units. Single-unit starts were up 5.4% month-over-month and at their highest level since July.
• January Univ. of Michigan Consumer Sentiment - Prelim 54.0 (Briefing.com consensus 53.0); Prior 52.9
  • The key takeaway from the report is that consumer sentiment, while improved a bit, is still guarded due to lingering concerns about high prices and softening labor markets.