U.S. stocks advanced in early trading on Friday, with the Dow Jones Industrial Average and the S&P 500 index both approaching their all-time highs. The U.S. Supreme Court may issue a ruling on the legality of tariffs imposed by former President Donald Trump. The U.S. economy added 50,000 non-farm payroll jobs in December, falling short of expectations, while the unemployment rate dropped to 4.4%, also below forecasts.
The Dow Jones Industrial Average rose by 105.14 points, or 0.21%, to 49,371.25; the Nasdaq Composite increased by 41.67 points, or 0.18%, to 23,521.69; and the S&P 500 climbed 20.82 points, or 0.30%, to 6,942.28. Economic data released before the market opened on Friday showed that the U.S. added 50,000 non-farm payroll jobs in December, below the consensus estimate of 73,000 from economists surveyed by Dow Jones. The unemployment rate decreased to 4.4% from 4.6%, lower than the economists' expectation of 4.5%. The December jobs report indicated a slight moderation in the labor market while remaining stable, potentially guiding the Federal Reserve towards interest rate cuts later this year. Investors are currently awaiting a potential ruling from the U.S. Supreme Court regarding the legality of tariffs imposed by former President Donald Trump, a decision that could impact trade policy and the nation's fiscal condition. It is important to note that it is uncertain whether the high court will issue a ruling on Friday. Such a ruling could upend U.S. trade policy and disrupt negotiations that have been progressing for months with partner nations. If the decision goes against Trump, corporate executives, customs brokers, and trade lawyers are preparing for a potential "refund battle" to recover approximately $150 billion in tariffs already paid by importers to the U.S. government. "Businesses have adopted a wait-and-see approach regarding the legality of the Trump tariffs before beginning to replenish inventories. The Supreme Court may issue a ruling. I believe businesses might then restart inventory rebuilding, thereby kickstarting the manufacturing cycle," said Ohyung Kwon, Chief Equity Strategist at Wells Fargo. Additionally, investors will monitor the progress of Trump's directive for "his representatives" to purchase $200 billion in mortgage-backed securities, a move he claims will lower interest rates and monthly payments. Shares of Generac, an energy technology solutions provider, rose more than 3% after Baird upgraded the company's rating to "Outperform," citing several unique catalysts, including opportunities in commercial and industrial diesel generator sets. This marks the second rating upgrade for the stock in two days, following an upgrade to "Buy" from Citigroup on Thursday. U.S. stocks closed mixed on Thursday as investors continued to rotate out of technology shares. The Nasdaq Composite, heavily weighted with tech stocks, closed down 0.4%, dragged lower by declines in Nvidia, Palantir, and Broadcom. The Dow Jones Industrial Average gained 270 points, or approximately 0.6%. The S&P 500 ended the day with a slight increase. U.S. stocks have maintained an upward trend for the week so far. To date, the S&P 500 is up about 0.9% for the week, while the Dow and the Nasdaq have gained approximately 1.8% and 1.1%, respectively.
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