U.S. stocks are consolidating just below a key technical magnet, suggesting underlying strength despite the lack of a breakout. Importantly, momentum indicators show the market is not overbought, increasing the odds of a push higher if supportive catalysts emerge. However, the latest December jobs report has complicated the Federal Reserve’s path. Payroll growth came in slightly below expectations, while the unemployment rate fell to 4.4%, a level that makes an immediate rate cut more difficult even as markets continue to price one in.
Outside of macro data, major corporate and policy developments are shaping sector leadership. Meta announced an aggressive, long-term commitment to nuclear power, signing multi-decade energy agreements and supporting new reactor development. This highlights how AI-driven power demand is increasingly influencing capital allocation and energy strategy.
Housing is another focal point. President Trump directed government-sponsored enterprises to purchase large amounts of mortgage bonds to stimulate home buying. While housing starts disappointed, stronger building permits suggest builders remain optimistic, supported by the prospect of lower mortgage rates.
Geopolitically, oil markets remain sensitive to U.S. policy in Venezuela, while tensions in Asia are rising as China restricts rare earth exports to Japan. These crosscurrents underscore why markets remain resilient but cautious near current levels.
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