US open: Stocks flat as jobs report sends mixed messages on labour market

(Sharecast News) - US stocks were flat in early deals on Friday, with markets trading within a narrow range, after the latest jobs report failed to resolve uncertainty regarding the Federal Reserve's next interest-rate decision.

By 1509 GMT, the Dow and Nasdaq were both down 0.1%, while the S&P 500 gained 0.1%.

Data released before the opening bell showed that US jobs growth slowed more than expected in December. While the unemployment rate fell more than predicted, wage inflation also picked up more than analysts' forecasts.

"The US labour market report for December was both dovish and hawkish," said Kathleen Brooks, research director at XTB.

Non-farm payrolls rose by 50,000 last month, the Bureau of Labor Statistics reported, coming in less than the 60,000 additions expected by analysts. December's figures were lower than a 56,000 gain in November, which was revised down from the initial estimate of 64,000.

December's data - the first 'clean' jobs report unaffected by October's record government shutdown - also revealed that the unemployment rate reduced to 4.4% in December, down from a four-year high of 4.6% the month before, while the annual increase in average hourly earnings jumped to 3.8% from 3.6%.

"There is now only a 5% chance of a Fed rate cut on 28th January, down from an 11% chance of a cut before the NFP reading," Brooks said. "Overall, the market still expects two cuts this year, but the drop in the unemployment rate and the pick-up in wage growth could cause the hawks to take back some control at the Fed after three rate cuts at the back end of 2025."

In other macro news, the University of Michigan's consumer sentiment index rose to a four-month high of 54.0 in January, up from 52.9 in December and ahead of the 53.5 consensus estimate. Meanwhile, the Census Bureau reported that US housing starts dropped 4.6% to 1.246m in October, the lowest since mid-2020 and under the 1.246m forecast, while building permits slipped 0.2% to 1.412m.

In other developments, Donald Trump has cancelled a second wave of attacks on Venezuela, the US president claimed on Friday, in return for Caracas continuing to cooperate with Washington. Trump is due to meet with oil company executives later, and said that a social media post that "at least 100 Billion Dollars will be invested by BIG OIL" in the South American nation.

Meta unveils nuclear-power plans

Facebook owner Meta Platforms inched lower after announcing new agreements with three companies to back the next generation of American nuclear power plants, which it claims will help "power our AI future".

Meta announced new partnerships with nuclear power developers Oklo and TerraPower to support new nuclear reactors and the development of nuclear technologies. The firm is also providing financial support through a deal with Vistra to extend the lifespan and energy production at two plants across Ohio and one in Pennsylvania.

Meta was trading slightly down, while shares in Vistra and Oklo surged 14% and 13% respectively.

Southwest Airlines was flying higher after JPMorgan double-upgraded its rating on the stock from 'underweight' to 'overweight', lifting its price target from $36 to $60.