US Equities closed sharply lower on Friday, following a stronger-than-expected jobs report that dampened expectations for further interest rate cuts by the Federal Reserve in 2025. The S&P 500 and Nasdaq 100 both dropped 1.5%, while the Dow Jones plunged almost 700 points. The December jobs report showed a robust labor market, with 256,000 new jobs and a decline in the unemployment rate to 4.1%, surpassing forecasts. This raised concerns that the Fed could keep rates elevated for a longer period. Meanwhile, the University of Michigan’s consumer sentiment index showed growing inflation expectations. Financials, real estate, and tech stocks led the declines, with Nvidia falling nearly 3%. On the corporate front, shares of Delta Air Lines soared 9% after exceeding earnings and revenue forecasts, while Walgreens surged 27.5% following strong earnings results. For the week, the S&P 500 lost 1.9%, the Nasdaq dropped 2.2%, and the Dow declined 1.8%.
The BSE Sensex experienced a highly volatile session on Friday, closing about 0.3% down at 77,378,9 and marking the third straight day of decreases. Market sentiment continued to be dented by concerns over anticipated weaker Q3 earnings, slowing growth and continued foreign investors outflows. Global uncertainty also contributed, particularly due to worries about the potential policy actions of US President-elect Donald Trump. Despite some support from the IT sector, the weak performance of financials and other heavyweight sectors dragged the markets lower. Shares of Tata Consultancy Services (TCS) rose 5.7%, making it the top performer, as investors reacted positively to its Q3 results and optimistic demand revival guidance. For the week, the Sensex lost approximately 2.3%, following two weeks of gains.
The Shanghai Composite dropped 1.33% to close at 3,169, while the Shenzhen Component tumbled 1.8% to 9,796 on Friday, following the People’s Bank of China’s announcement that it will temporarily halt government bond purchases due to a shortage of supply. This move is part of a broader effort to temper investor sentiment amid concerns over weak economic growth, which has pressured the currency and eroded investor confidence. Investors also adopted a cautious stance while awaiting policy announcements from Beijing. Markets were fearful that China will fail to implement enough stimulus measures to arrest the economic slowdown and deflationary pressures. Notable losses were seen in stocks such as ZTE Corp (-1.7%), Leo Group (-3.7%), East Money (-2.7%), Zhongji Innolight (-6.9%), and Dawning Information (-1%).
The Nikkei 225 Index fell 1.05% to close at 39,190 while the broader Topix Index lost 0.8% to 2,714 on Friday, with both benchmarks sliding for the third straight session and posting their second straight weekly drop. Investor sentiment turned cautious ahead of the US jobs report, which could influence the Federal Reserve's monetary policy outlook for the year. Global stocks also faced pressure on Thursday after the release of the latest Fed minutes, which pointed to a potential slowdown in the pace of policy easing due to ongoing concerns over inflation. Domestically, Japan's real household spending fell 0.4% year-on-year in November, a softer drop compared to forecasts of a 0.6% decline, while household income rose 0.7%. In corporate news, shares of Fast Retailing, the owner of Uniqlo, tumbled 6.5% after reporting weaker-than-expected results in China, despite posting higher-than-anticipated profits and revenue.
