S&P 500 Hits Record Close At 6966 as Jobs Report Fuels Market Optimism

TLDR

Table of Contents

S&P 500 rose 0.6% to close at 6,966.28 after December jobs growth missed forecasts.
Nasdaq Composite increased 0.8% and Dow added 0.5%, both setting all-time highs.
The US added 50,000 jobs in December, below the expected 70,000.
Homebuilder stocks surged after Trump’s plan to buy $200B in mortgage-backed securities.

Wall Street closed out the first full trading week of 2026 on a strong note, with the S&P 500 reaching a new record high of 6,966.28. Investors reacted positively to softer-than-expected job growth in December, which reduced the likelihood of an imminent interest rate cut. Gains across major indexes, including the Nasdaq and Dow, were driven by optimism around housing, energy deals, and shifting expectations for Federal Reserve policy this year.

Jobs Report Sparks Rally on Wall Street

The S&P 500 climbed 0.6% to close at 6,966.28, reaching a new record as markets reacted to December’s jobs data. The Nasdaq Composite rose 0.8% to 23,671.35, while the Dow Jones Industrial Average gained 0.5% to close at 49,504.07.

JUST IN: 🇺🇸 S&P 500 closes above 6,966 for the first time in history. pic.twitter.com/ydbNRjZ3hf
— Watcher.Guru (@WatcherGuru) January 9, 2026

The Labor Department reported 50,000 jobs were added in December, falling short of the 70,000 estimate. However, the unemployment rate dropped to 4.4% from 4.6% in November. This signaled a steady labor market and reduced the likelihood of a Federal Reserve rate cut in January.

Interest Rate Expectations Shift

Following the report, traders lowered the probability of a rate cut this month to 5%, down from 11% a day earlier, according to CME Group data. The two-year Treasury yield rose slightly to 3.53%, reflecting short-term expectations for Fed policy. The 10-year yield eased to 4.16%, showing stable longer-term outlooks.

Economists noted that the labor market remains balanced. Ellen Zentner, Chief Economic Strategist at Morgan Stanley, said, “Lower rates are likely coming this year, but the markets may have to be patient.”

Housing and Energy Stocks Lead Market Gains

Homebuilder stocks saw strong gains after President Donald Trump announced a plan for Freddie Mac and Fannie Mae to purchase $200 billion in mortgage-backed securities. The goal is to reduce mortgage rates and improve housing affordability.

Builders FirstSource jumped 12%, while Lennar rose 8.9%. D.R. Horton gained 7.8% and PulteGroup climbed 7.3%. These increases reflected investor confidence in the plan’s impact on housing demand.

In the energy sector, Vistra surged 10.5% after signing a 20-year agreement to provide nuclear power to Meta Platforms. Oklo, another nuclear firm, rose 7.9% after announcing a similar deal with Meta to develop a site in Ohio.

Mixed Results for Individual Companies

General Motors declined 2.7% after announcing a $6 billion charge related to its pullback from electric vehicles. This follows a previous $1.6 billion charge, as the company adjusts to changing market conditions, including reduced EV tax credits.

WD-40 shares dropped 6.6% after it reported weaker-than-expected earnings. The company attributed the result to timing issues but maintained its outlook for the full year.

Global and Broader Market Trends

The Russell 2000 index, which tracks smaller US companies, rose 4.6% for the week. This outpaced the S&P 500’s 1.6% weekly gain, suggesting broader market participation.

In global markets, European and Asian indexes also advanced. France’s CAC 40 rose 1.4%, and Japan’s Nikkei 225 added 1.6%.

Investors remain alert to upcoming developments, including a possible Supreme Court decision on Trump-era tariffs and ongoing discussions over Venezuela’s energy resources.

The S&P 500’s new high positions it just short of the 7,000 milestone, with investors continuing to monitor economic signals and central bank moves closely.