As of today, the S&P 500 Index is up 0.02%, while the Dow Jones Industrial Average has risen by 0.45%. In contrast, the Nasdaq 100 Index is down 0.77%. March E-mini S&P futures also reflect this trend with a slight increase of 0.02%, though March E-mini Nasdaq futures have decreased by 0.75%. Stocks are seeing mixed results primarily due to weaknesses in the semiconductor, data storage, and software sectors, despite gains in defense stocks after President Trump proposed an increase to military spending by 50%, amounting to $1.5 trillion by 2027.
Key economic data released today highlighted a 4.9% rise in U.S. Q3 nonfarm productivity and a 1.9% drop in unit labor costs, exceeding expectations. Additionally, the U.S. trade deficit unexpectedly shrank to $29.4 billion, the smallest in 16 years. Challenger job cuts fell to a 17-month low of 35,553, showcasing labor market strength, while initial unemployment claims rose by 8,000 to 208,000, still below expectations of 212,000.
Looking ahead, Friday is anticipated to show a forecasted increase of 70,000 in December nonfarm payrolls, with the unemployment rate predicted to decline slightly to 4.5%. Market sentiment is currently evaluating the odds of a potential 25 basis point rate cut at the upcoming Federal Open Market Committee meeting on January 27-28, which stands at approximately 12%.
