U.S. stocks rallied strongly in the first full trading week of the new year, with the Dow surging 2.3%, the Nasdaq climbing 1.9% and the S&P 500 gaining 1.6%. The upbeat tone came after the Labor Department’s December jobs report showed payrolls rising by 50,000, below expectations while the unemployment rate edged down to 4.4%—signs of a gradually cooling labor market that boosted optimism over rate cuts later in 2026.

Gina Bolvin of Bolvin Wealth Management said the data supports a balanced outlook, giving the Fed confidence its policy is working while encouraging investors to favor growth with discipline. Additional support came from the University of Michigan’s survey showing consumer sentiment rising to 54.0 in January, slightly above forecasts, reinforcing positive momentum on Wall Street.

Housing stocks turned in some of the market's best performances, with the Philadelphia Housing Sector Index spiking by 5.7%. Semi-conductor stocks displayed substantial strength, as reflected by the 2.7% surge by the Philadelphia Semiconductor Index. Networking, airline and utilities stocks saw significant strength, moving higher along with most of the other major sectors.

Asia-Pacific stocks moved mostly higher. Japan's Nikkei 225 Index jumped by 1.6%, while China's Shanghai Composite Index advanced by 0.9%. The major European markets moved upside while the French CAC 40 Index shot up by 1.4%, the U.K.'s FTSE 100 Index climbed by 0.8% and the German DAX Index rose by 0.5%. The major European markets have also moved to the upside on the day. While the French CAC 40 Index shot up by 1.4%, the U.K.'s FTSE 100 Index climbed by 0.8% and the German DAX Index rose by 0.5%.

In the bond market, treasuries moved modestly higher after coming under pressure in the previous session. Subsequently, the yield on the benchmark ten-year note which moves opposite of its price, dipped 1.2 bps to 4.171%.