As of the time of publication, the Nasdaq has fallen over 2%, while the S&P 500 and Dow Jones have both declined over 1%.

The three major US stock indices are likely to record declines this week. As of Wednesday's close, the Dow Jones fell 0.2%, the S&P 500 Index dropped 0.4%, and the Nasdaq decreased by 0.7%. Thursday is a national day of mourning for former US President Jimmy Carter, and the stock market will be closed.

The US Department of Labor reported that non-farm employment in December increased by 0.256 million, greatly exceeding expectations, and the unemployment rate fell to 4.1%.

Previously, economists surveyed by Dow Jones had expected this figure to increase by 0.155 million, predicting the unemployment rate would remain at 4.2%. Meanwhile, the 75 economists surveyed by Bloomberg predicted an average increase of 0.165 million in non-farm employment for December, with a forecast range from an increase of 0.1 million to an increase of 0.268 million.

The report also indicated that the labor force participation rate in the USA for December was 62.5%, unchanged from November.

The average hourly wage increased by 0.3% month-on-month, which was estimated to be an increase of 0.3%, while the previous month recorded an increase of 0.4%. The average hourly wage increased by 3.9% year-on-year, with the previous month showing an increase of 4.0%, estimated to be an increase of 4.0%.

The number of non-farm jobs in the private sector increased by 0.223 million, compared to an increase of 0.182 million the previous month. The estimate was an increase of 0.14 million, while the predictions from the 32 surveyed economists ranged from an increase of 0.095 million to an increase of 0.203 million.

The number of non-farm jobs in the manufacturing sector decreased by 0.013 million, while the previous month recorded an increase of 0.025 million; the estimate was an increase of 0.005 million, with predictions from the 12 surveyed economists estimating a range from a decrease of 0.01 million to an increase of 0.012 million.

The unemployment rate is 4.1%, down from 4.2% the previous month; the estimate was 4.2%, with predictions from the 71 surveyed economists ranging from 4.1% to 4.4%. The underemployment rate is 7.5%, down from 7.7% the previous month.

Investors are closely monitoring the December non-farm employment data to further determine the future interest rate path of the Federal Reserve.

U.S. treasury bonds plummeted, and yields soared. Strong non-farm employment data prompted traders to push back the expected timing for the Federal Reserve's next interest rate cut to the second half of the year.

The number of non-farm jobs in the U.S. saw the largest growth in nine months in December, pushing the yield curve higher, with the 10-year yield reaching its highest level since 2023, while the 2-7 year treasury bond yields rose by over 10 basis points, and the 30-year yield climbed to 5%.

Kevin Flanagan, head of fixed income strategy at Wisdom Tree, stated: "The labor market continues to remain robust and resilient; it is only a matter of time before the 10-year U.S. treasury yield joins the 20-year and 30-year yields in breaking above 5%."

Zachary Griffiths, the head of investment-grade and macroeconomic strategy at CreditSights, stated that after the release of non-farm payroll data, US Treasury yields increased, the yield curve flattened, and the market re-priced expectations for short-term interest rates.

Swap traders expect the Federal Reserve to cut rates by a total of about 28 basis points this year, down from around 38 basis points before the data was released.

The non-farm employment report led investors to predict that the Federal Reserve will delay rate cuts. The market now expects the next rate cut to be around October, rather than the previously predicted June.

Earlier this week, the Institute for Supply Management (ISM) service index showed that US service growth accelerated in December, along with rising prices, which heightened concerns about sticky inflation. Additionally, according to data from payroll service provider ADP, US private sector jobs added last month were fewer than expected.

Focus on individual stocks

The Semiconductors Sector experienced widespread declines, $Advanced Micro Devices (AMD.US)$with a drop of over 5%. $NVIDIA (NVDA.US)$Down over 3%

The Aviation Sector rose broadly, $Delta Air Lines (DAL.US)$up more than 11%,$United Airlines (UAL.US)$up nearly 5%

The Oil Sector mostly rose,$Chevron (CVX.US)$、$Occidental Petroleum (OXY.US)$All rise by more than 2%.

Pharmacy Stocks.$Walgreens Boots Alliance (WBA.US)$Increased by over 23%, with fiscal year 2025 performance exceeding expectations.

$FuboTV (FUBO.US)$Continued to rise by over 6%,$Disney (DIS.US)$Fox and Warner Bros. Discovery announced on Friday that they have canceled plans to launch the jointly owned streaming platform Venu Sports, which led to an increase in the stocks of competitor FuboTV.

Editor/ping