US stocks have has fallen departed the first full week of 2025.
Over the past five trading sessions, the S&P 500 is down more than 1.5%, while the Nasdaq Composite is down nearly 2%, while the Dow Jones Industrial Average is down about 1.5%.
Investors will be greeted by an important round of labor market data next week, with Friday morning’s Bureau of Labor Statistics jobs report serving as the week’s most important release. Updates on job openings and private wage growth, as well as data on service sector activity, are also on the schedule.
The coming week will provide the final picture of the labor market before the Fed’s next meeting on January 30-31.
In corporate news, investors will be watching for key announcements from technology companies such as Nvidia (NVDA:) during the Consumer Electronics Show. Meanwhile, Delta (DALL:) and Constellation brands (STZ:) is expected to report quarterly results.
At his year-end press conference on December 18, Fed Chairman Jerome Powell described the labor market as “good” overall, noting that “risks are receding.” which appeared in the summer of 2024 as the increase in the unemployment rate “appears to have abated”.
“The labor market is weaker now than it was before the pandemic, and it’s clearly still cooling, so far, gradually and steadily,” Powell said.
Economists expect the data to show a more gradual cooling.The December jobs report is expected to show that the US labor market added 153,000 jobs in the month, up from 227,000 in November, while the unemployment rate is expected to hold at 4.2 percent level.
“The labor market is on solid footing, but employment growth has slowed and overall labor market conditions have cooled in 2024,” Morgan Stanley’s US economist Sam Coffin wrote in a note to clients softening as it seemed last summer.”
As of Friday afternoon, markets were pricing in just an 11% chance the Fed will cut rates at its January meeting. according to the CME FedWatch tool.
The CES tech conference kicks off Monday with a keynote from Nvidia CEO Jensen Huang, and an analyst Q&A is scheduled for Tuesday.
Shares of Nvidia fell more than 1% after the earnings call on Nov. 20 amid concerns over delays in shipments of its new Blackwell chip. Nvidia shares still finished 2024 more than 150% increase.
Bank of America’s Vivek Arya told Brian Sozzi the opening bid podcast Thursday that broader market forces and company-specific issues drove the selloff in Nvidia shares late last year. trade restrictions on China and goods from China.
He added that for Nvidia, “the last couple of quarters haven’t been really clean as they’ve been going through growing pains from one generation product, which was Hopper, to the next generation product.”
The S&P 500’s historically best seven-day stretch has come and gone without any gains since 1950, with the S&P 500 up 1.3% in the seven trading days beginning on December 24th. Santa’s rally.
However, this year the indicator decreased by about 0.5%. Adam Turnquist, chief technical strategist at LPL Financial, wrote in a note to clients that when the S&P 500 has a negative return during this period, it usually indicates a weaker year for stocks.
although as we mentioned last weekThere was no Santa rally last year either, and the S&P 500 is still up roughly 24% in 2025.
“I don’t know how far the market is from here,” Ritholtz Wealth Management chief market strategist Callie Cox told Yahoo Finance At the Santa Claus rally, doesn’t mean we’re doomed.”
One major catalyst could come with next week’s jobs report.^ TNX) about 4.6% helped fuel the sour sentiment around stocks, Michael Kantrowitz, chief markets strategist at Piper Sandler, believes help may be on the way.
“We think we need to see some softer employment for prices to start coming down,” Kantrowitz said in a video to clients on Friday.
Whether soft data comes next week or later in the first quarter, Kantrowitz believes this narrative shift away from a rising rate environment could help “get stocks going once again.”
Monday
Economic data. S&P Global US manufacturing PMI, December final (expected 58.3, previously 58.5); S&P Global US composite PMI, December final (previously 56.6); Factory orders, November (-0.3% expected, +0.2% ahead); Durable goods orders, final November (-0.3% expected, -1.1% ahead)
Revenues. There are no notable earnings releases.
Tuesday
Economic data. Job Openings, November (7.7 million expected, previously 7.74 million); ISM Services Index, December (expected 53.1, previously 52.1)
Economic data. MBA mortgage applications, week ended January 3; ADP Private Payrolls, December (+130,000 expected, +146,000 previously); Minutes of the December FOMC meeting
Revenues. Albertsons (ACI:), Helena of Troy (ENTIRELY), Jeffery (JEFF:)
thursday
Economic data. Challenger job cuts, year over year, December (+26.8% prior); Initial jobless claims for week ending Jan. 4 (previously 211,000)
Economic calendar. Nonfarm payrolls, December (+153,000 expected, +227,000 previously); Unemployment rate, December (expected 4.2%, previously 4.3%); Average hourly earnings, month-over-month, December (+0.3% expected, +0.4% previously); Average hourly earnings, year over year, December (+4% expected, +4% previously); Average weekly hours worked in December (expected 34.3, previously 34.3); Labor force participation rate, December (62.5% previously)
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