Wall Street rises to records after the unemployment rate improves
[January 10, 2026] By
STAN CHOE
NEW YORK (AP) — U.S. stocks hit records Friday following a mixed report
on the U.S. job market, one that may delay another cut to interest rates
by the Federal Reserve but does not slam the door on it.
The S&P 500 climbed 0.6% and topped its prior all-time high set earlier
in the week. The Dow Jones Industrial Average added 237 points, or 0.5%,
and likewise set a record, while the Nasdaq composite led the market
with a 0.8% gain.
The moves came after the U.S. Labor Department said employers hired
fewer workers during December than economists expected, though the
unemployment rate improved and was better than expected. It reinforced
how the U.S. job market may be in a “ low-hire, low-fire” state and may
hopefully avoid a recession.
On Wall Street, power company Vistra soared 10.5% to help lead the
market after signing a 20-year deal to provide electricity from three of
its nuclear plants to Meta Platforms. Big Tech companies have been
signing a string of such deals to electrify the data centers powering
their moves into artificial-intelligence technology.
Oklo jumped 7.9% after saying it also signed a deal with Meta Platforms
that will help it secure nuclear fuel and advance its project to build a
facility in Pike County, Ohio.
Homebuilders and other companies involved in the housing market were
strong in their first trading after President Donald Trump announced a
plan to lower mortgage rates. Trump on late Thursday called for the
purchase of $200 billion in mortgage bonds, similar to how the Fed in
the past has bought bonds backed by mortgages to bring down mortgage
rates.
Builders FirstSource, a supplier of building products, jumped 12% for
one of the biggest gains in the S&P 500 along with Vistra. Among
homebuilders, Lennar rallied 8.9%, D.R. Horton climbed 7.8% and
PulteGroup rose 7.3%.
They helped offset a 2.7% drop for General Motors. The auto giant said
it will take a $6 billion hit to its results for the last three months
of 2025 related to its pullback from electric vehicles. That’s on top of
the $1.6 billion in charges GM took in the prior quarter. Fewer tax
incentives and easier fuel-emission regulations have been eating into
demand for EVs.
WD-40 tumbled 6.6% after reporting a weaker profit for the latest
quarter than analysts expected. Chief Financial Officer Sara Hyzer said
the soft numbers were primarily because of timing issues, not weaker
demand from end customers, and the company stood by its financial
forecasts for the upcoming year.
All told, the S&P 500 rose 44.82 points to 6,966.28. The Dow Jones
Industrial Average added 237.96 to 49,504.07, and the Nasdaq composite
climbed 191.33 to 23,671.35.
In the bond market, Treasury yields were mixed.
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Aman Patel works on the floor at the New York Stock Exchange in New
York, Friday, Jan. 9, 2026. (AP Photo/Seth Wenig)
 Friday’s improvement in the
unemployment rate was enough to get traders to ratchet back
expectations for a cut to interest rates at the Fed’s next meeting,
which is scheduled for later this month. Traders are now forecasting
just a 5% chance of that, down from 11% a day before, according to
data from CME Group.
But traders nevertheless still largely expect the Fed to cut rates
at least twice this upcoming year.
Whether they’re correct carries high stakes for financial markets.
Lower interest rates can goose the economy and push up prices for
investments, though they can also worsen inflation at the same time.
And inflation has stubbornly remained above the Fed’s 2% target.
“Until the data provide a clearer direction, a divided Fed is likely
to stay that way,” according to Ellen Zentner, chief economic
strategist for Morgan Stanley Wealth Management. “Lower rates are
likely coming this year, but the markets may have to be patient.”
The yield on the 10-year Treasury eased to 4.16% from 4.19% late
Thursday. It tends to track expectations for longer-term economic
growth and inflation.
The two-year Treasury yield, which more closely tracks forecasts for
what the Fed will do with short-term interest rates in the near
term, rose to 3.53% from 3.49%.
A separate report released Friday morning suggested sentiment among
U.S. consumers is strengthening, particularly among lower-income
households. Perhaps more importantly for the Fed, the preliminary
report from the University of Michigan also said expectations for
inflation in the coming 12 months may be at their lowest level in a
year. That could give it more freedom to cut interest rates.
Hopes for both lower interest rates and a solid economy have helped
other areas of the stock market climb recently, wresting leadership
away from the Big Tech and AI stocks that dominated the market for
years. The smaller stocks in the Russell 2000, for example, climbed
4.6% this week, much more than the 1.6% rise of the S&P 500.
In stock markets abroad, indexes rose across much of Europe and
Asia.
The French CAC 40 climbed 1.4%, and Japan’s Nikkei 225 jumped 1.6%
for two of the world’s bigger gains.
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AP Business Writers Chan Ho-him and Matt Ott contributed.
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