Closing Recap 

U.S. stocks finished mixed on Thursday after another choppy session as investors digested a flurry of economic data ahead of Friday’s crucial Nonfarm Payrolls report. The S&P 500 was essentially flat, with a late-day dip erasing earlier gains, as strength in cyclical sectors was offset by a renewed slide in technology. The Nasdaq fell -0.44% on profit-taking, while the Dow eked out a small gain. The U.S. dollar and Treasury yields firmed after weekly jobless claims fell to a two-year low, a sign of ongoing labor market resilience that could temper the market’s aggressive rate-cut expectations. Gold was little changed, while crude oil surged over 3% on geopolitical tensions. 

Key Takeaways 

• Mixed, Choppy Session for Stocks: Major indices were mixed in a low-volume session as traders squared up positions ahead of Friday’s pivotal Nonfarm Payrolls report and a potential Supreme Court ruling on tariffs. 
• Tech Slides, Cyclicals Outperform: The technology sector was the main laggard, weighing on the S&P 500, while cyclical and value-oriented sectors like Industrials and Financials held up better. 
• All Eyes on NFP and Supreme Court: Friday is set up to be a highly volatile session, with the release of the December NFP report and the first possible opportunity for a Supreme Court verdict on President Trump’s global tariffs. 
• Goldman Sachs Expects Strong NFP: Goldman Sachs is forecasting a stronger-than-consensus jobs report, with headline payroll growth of 70,000, a view that could challenge the market’s aggressive pricing for Fed rate cuts if it materializes.
• Strong Jobless Claims Boost Dollar and Yields: Weekly Jobless Claims unexpectedly fell to their lowest level since September 2022, providing a bid for the U.S. dollar and pushing Treasury yields higher. 
• Yen Pressured by Geopolitical Tensions and Dovish Politics: The Japanese Yen is under pressure, with USD/JPY pushing above 157, weighed down by escalating trade tensions with China over rare-earth exports and a pro-stimulus government.
• Fed’s Miran Calls for 1.5% in Cuts: Ultra-dovish Fed Governor Stephen Miran is now calling for 1.5 percentage points of rate cuts, a far more aggressive path than the market is currently pricing. 
• Oil Surges 3% on Geopolitical Tensions: Crude oil was the standout performer, with WTI jumping over 3% as investors reacted to reports of growing protests and internet blackouts in Iran. 
• Long-Term Bull Case for Gold and Stocks: Despite near-term jitters, major banks are rolling out very bullish long-term forecasts. HSBC sees a path to $5,000 for Gold, while Oppenheimer is calling for the S&P 500 to hit 8,100 in 2026.
• Bitcoin Recovers Above $91k: The crypto market is showing signs of stabilizing, with Bitcoin rebounding to trade above the key $91,000 level after a sharp drop earlier in the week. 
• Defense Stocks in Focus on Budget and Geopolitics: Defense stocks are a key sector to watch after President Trump called for a $1.5 trillion military budget and geopolitical risks in Venezuela and Iran intensify.

Market Overview

The market remains in a state of cautious consolidation, unwilling to make any significant directional bets ahead of Friday’s high-stakes event risk. Thursday’s session was another day of choppy, sideways trading, with the market’s focus squarely on the upcoming December Nonfarm Payrolls report. This release will be the most significant piece of the U.S. economic puzzle yet and has the potential to either validate or completely upend the market’s current dovish narrative. The day’s data was a mixed bag, with surprisingly strong jobless claims contrasting with a huge downside miss in announced layoffs from the Challenger report, leaving the picture of the labor market as cloudy as ever. Adding to the sense of anticipation is the looming possibility of a Supreme Court ruling on President Trump’s global tariffs, which could also be released on Friday. 

Index	Up/Down	%	Last
DJ Industrials	270.03	0.0055	49266
S&P 500	0.46	0.0001	6921
Nasdaq	-104.26	-0.0044	23480
Russell 2000	28.48	0.0111	2603

This dual-catalyst setup is a recipe for significant volatility. While Goldman Sachs suggests that the NFP report is unlikely to materially shift the Fed’s outlook unless it delivers a major surprise, the market’s reaction will be the ultimate arbiter. The recent price action has been a classic case of rotation, with money flowing out of the year’s winners in tech and into more value-oriented sectors. Whether this trend continues or reverses will be largely determined by the outcome of Friday’s high-impact events.

Economic Calendar 

Today is the main event of the week, with the release of the U.S. jobs report and the potential for a Supreme Court ruling on tariffs. Data Released Yesterday / Overnight: 

• U.S. Weekly Jobless Claims: Unexpectedly fell to 208,000, the lowest level since September 2022.
• U.S. Challenger Job Cuts (Dec): Showed a 50% m/m drop in announced layoffs, the lowest total since July 2024. 
• U.S. Trade Balance (Oct): The deficit narrowed to its lowest level since 2009. 
• Japanese Household Spending (Nov): Unexpectedly rebounded, surging +2.9% y/y, a positive sign for domestic demand. 

Today’s Economic Calendar: 

• European Session: An extremely light calendar with only Swiss unemployment data released. 
• U.S. Session: All eyes are on the U.S. December Nonfarm Payrolls (NFP) report. The consensus is for a gain of +60K jobs with the unemployment rate easing to 4.5%. 
• U.S. Supreme Court: May release its verdict on President Trump’s global tariffs at 10:00 AM ET. 
• Canadian Employment Report is also due. 

Asset Class Spotlight: FX, Commodities, Bonds & Crypto

Gold prices were little changed, with February futures settling at $4,460.70 an ounce as investors adopted a wait-and-see approach ahead of the jobs data. The big story in commodities is the powerful rally in WTI Crude Oil. Crude oil was the standout performer, with WTI surging over 3% to settle at $57.76 a barrel. The rally was driven by a classic geopolitical risk premium, as reports of growing protests and internet blackouts in Iran raised fears of a potential supply disruption.

Asset	Up/Down	Unit / % Change	Last
WTI Crude	1.77	0.0316	57.76
Gold	-1.8	-0.0004	4460.7
EUR/USD	-0.0022	-0.0019	1.1651
USD/JPY	0.07	0.0004	156.83
Bitcoin	1,000+	0.011	91000
10-Year Note Yield	0.041	0.0099	0.04179

The U.S. dollar is holding steady ahead of the NFP report after a modest rebound on Thursday, while the yen is under pressure. 

• EUR/USD: The pair is consolidating its recent losses, trading around 1.1650. The euro 
• is on the back foot as the dollar firms, but the market’s dovish Fed expectations are likely to limit the downside. A large $1.3B options expiry at the 1.1600 level provides a major support level below the current price.
• GBP/USD: The pound is holding just above the 1.3400 level, consolidating after a three-day slide, consolidating its recent sharp slide as traders weigh the dovish Bank of England against the weaker dollar. The divergent policy paths between a dovish Fed and a less-dovish Bank of England should provide underlying support for the cable. 
• USD/JPY: The yen is the main loser, with the pair rallying towards 157.50. The currency is being hit by a combination of a firmer U.S. dollar, rising China-Japan tensions, and a broader risk-on mood that is diminishing its safe-haven appeal, which is overshadowing the strong domestic data. A notable $750M options expiry at the 158.00 level provides a key resistance target.

Cryptocurrencies: After a period of extreme volatility, the crypto market is showing signs of stabilizing. Bitcoin rebounded to trade above the $91,000 level after a sharp drop earlier in the week. The market is finding some relief from the broader improvement in risk sentiment, but remains vulnerable to macro headwinds. U.S. Treasury yields were higher as investors positioned for a potentially strong jobs report. The benchmark 10-year yield rose 4.1 basis points to 4.18%, reflecting the market’s ongoing uncertainty about the Fed’s future policy path.

Looking Ahead 

Today is a critical day for the market. The U.S. Nonfarm Payrolls report at 8:30 AM ET will be the main event, with the potential to either validate or completely upend the market’s current dovish narrative. A weak report would all but guarantee further Fed easing and could ignite the next leg of the year-end rally. Conversely, a surprisingly strong print could challenge the market’s conviction and lead to a sharp reversal in the dollar and a sell-off in stocks. The looming Supreme Court ruling on tariffs adds another layer of high-stakes event risk, making for a potentially explosive end to the trading week.

What to Watch Today

•  The NFP and SCOTUS Double-Header: This is a huge day of event risk. The NFP report will be a critical test for the market’s aggressive pricing of Fed rate cuts. A strong number could trigger a hawkish repricing. A weak number would give the doves the final green light. The Supreme Court’s decision, if it comes, could reshape the global trade landscape and have massive implications for a wide range of sectors. 
• Trump’s Fiscal Populism: President Trump’s move to directly intervene in the mortgage market is a major new development. It blurs the lines between fiscal and monetary policy and signals a more populist approach to the economy heading into the 2026 election cycle. 
• The Yen’s Geopolitical Headwinds: The escalating trade spat between Japan and China over rare earths is a new and significant risk factor for the Yen. This is now a key geopolitical hotspot to watch. 
• The Gold Correction vs. Long-Term Bull Case: Gold is in a corrective phase, but the long-term bull case remains very much intact, with major banks like HSBC forecasting a path to $5,000. Traders will be watching to see if dip-buyers emerge to defend key support levels.