The U.S. stock market enters the first full trading week of 2025 under pressure, with major indices posting losses over the past five sessions. The S&P 500 has declined by more than 1.5%, the Nasdaq Composite by nearly 2%, and the Dow Jones Industrial Average by about 1.5%.
This week, investors will focus on a crucial batch of labor market data, with the December jobs report from the Bureau of Labor Statistics (BLS) on Friday morning standing out as the key release. Additional reports on job openings, private wage growth, and services sector activity will provide a clearer picture of economic health ahead of the Federal Reserve’s next meeting on January 30-31.
The shortened trading week will also see markets closed on Thursday to honor the passing of former President Jimmy Carter.
Labor Market in the Spotlight
The U.S. labor market showed signs of cooling throughout 2024, a trend the Federal Reserve has largely welcomed. At his final press conference of the year on December 18, Fed Chair Jerome Powell described the labor market as “good” and noted that the “downside risks” evident earlier in the year had eased.
“The labor market is now looser than pre-pandemic, and it’s clearly still cooling further, so far in a gradual and orderly way,” Powell said. “We don’t think we need further cooling in the labor market to get inflation down to 2%.”
Economists are expecting the December jobs report to reflect this gradual cooling. Projections suggest the U.S. labor market added 153,000 jobs in December, down from 227,000 in November. The unemployment rate is anticipated to remain steady at 4.2%.
Morgan Stanley economist Sam Coffin noted in a client briefing that while employment growth slowed in 2024, the labor market avoided the sudden softening seen earlier in the year.
As of Friday, the CME FedWatch Tool showed markets pricing in just an 11% chance of a rate cut during the Federal Reserve’s January meeting.
Technology Sector in Focus
The tech industry will be in the spotlight this week as the CES (Consumer Electronics Show) begins Monday. A keynote address from Nvidia CEO Jensen Huang is expected to outline the company’s plans, while an analyst Q&A session is set for Tuesday.
Nvidia’s stock ended 2024 with gains of more than 150%, despite losing 1% since its November earnings release. The decline followed concerns over shipment delays for its new Blackwell chip.
Bank of America analyst Vivek Arya attributed the recent dip in Nvidia’s shares to broader market trends and company-specific challenges. Speaking on the Opening Bid podcast, Arya noted a shift in investor interest from semiconductors to software and pointed to Nvidia’s “growing pains” as it transitions between product generations.
