Weekly Market Commentary January 5th to January 9th 2026
The labor market concluded 2025 on a soft note. Despite increasing jobs by 50,000 in December, this figure was offset by downward revisions totalling 76,000 jobs across the preceding two months, resulting in a net decline of 26,000 jobs when accounting for revisions. The total net decrease for the fourth quarter of 2025 was 67,000 jobs.
The Unemployment Rate decreased to 4.4% from 4.6%. This decline was primarily attributed to a reduction in Labor Force Participation Rate (62.4%), rather than job creation, as fewer individuals were actively seeking employment. This dynamic supports the view of fewer rate cuts moving forward as there are not enough workers to support a robust labor market.
The Institute for Supply Management (ISM) Manufacturing Index registered 47.9 in December, marking the tenth consecutive month of contraction within the sector. This figure was below the consensus forecast of 48.4. The current business environment reflects significant challenges, with companies reportedly struggling with customer orders and overall financial flexibility. This is primarily attributed to new orders experiencing a third consecutive monthly decline and persistent uncertainty surrounding the unpredictable tariff landscape.
The ISM Services Index reached 54.4, surpassing expectations of 52.2 and marking a 14-month high. The services sector continues to be a robust driver of economic activity. All four subcomponents of the index, business activity, new orders, employment, and supplier deliveries showed positive performance
This week the S&P 500 roared to another all-time high, finishing at 6,966 up 1.57% for the week despite multiple newsworthy events that could have cautioned investors’ optimism. In fixed income markets, the 10-Year U.S. Treasury yield is holding relatively steady at 4.18%.
Next week important economic releases include: Consumer Price Index, Producer Price Index and Retail Sales.
