That compass has now been read. December's jobs report confirms what many suspected and few feared. Employment is cooling, but not cracking. Nonfarm payrolls rose by just 50,000, well below expectations. Revisions shaved another 76,000 jobs off the previous two months. Yet the unemployment rate slipped to 4.4%, a touch better than forecast. In other words, hiring is slowing, but people are still finding work.

Markets greeted the news with a shrug. Futures ticked slightly higher across the board, hardly the reaction of investors bracing for recession or celebrating an imminent rate-cut bonanza.

That matters enormously for the Federal Reserve. For months, policymakers have warned they want "more clarity" before cutting rates again. December's figures provide some, but not quite enough. Payroll growth is weaker than expected, but not weak enough. Unemployment is edging lower, not higher. Wage pressures were not dramatic enough to alarm, nor soft enough to reassure. The report neatly supports the Fed's preferred stance: wait and see.

Traders are still pricing roughly 60 basis points of rate cuts in 2026, but the path looks increasingly back-loaded. A January pause now feels less like a tactical choice and more like a baseline. This is shaping up to be a transition year for monetary policy, not a turning point. The era of aggressive easing is over: the era of cautious recalibration has begun.

Elsewhere, markets continue to search for conviction. Equity indices are modestly higher for the week, though enthusiasm has faded since the opening days. Technology-heavy benchmarks have lagged as the artificial-intelligence trade catches its breath. Nvidia and ASML dipped, reminding investors that even transformative technologies cannot defy gravity forever. AI remains alluring, but valuations still make people blink.

By contrast, defence stocks show no such hesitation. Rising military budgets, geopolitical tension and political consensus have turned the sector into early 2026's clearest winner.

The biggest potential shock may arrive not from data, but from the Supreme Court. The justices could rule at any moment on the legality of Mr Trump's sweeping tariffs. Legal experts think there is a good chance they will be struck down. That would create instant upheaval: tens of billions of dollars in duties might need to be repaid, and parts of America's trade architecture could be thrown into doubt. Markets might initially cheer lower trade barriers, but any rally could be fleeting.

The White House has hinted it has alternative plans ready, and uncertainty tends to outlive good news. Oil markets are already living proof of that. Prices fell earlier in the week on the prospect of extra supply if the United States starts managing Venezuelan crude.

They then rebounded sharply as fears of wider geopolitical conflict resurfaced. The logic flipped in a matter of days. Mr Trump wants cheap oil, but that clashes with the interests of America's own shale producers, who have warned that Venezuelan barrels could devastate domestic drillers.

Add threats against Iran and fresh sanctions on Russian oil buyers, and it is no wonder traders look confused. The oil market is doing what it does best: reflecting many interests at once, and satisfying none of them fully.

China offers little comfort. Inflation remains weak, producer prices are still falling, and the modest rise in consumer prices owes more to food costs than to genuine demand. The world's second-largest economy shows few signs of acceleration, reinforcing the sense that global growth in 2026 will be serviceable rather than spectacular.

In corporate news, Rio Tinto and Glencore are again flirting with a merger that would create a mining giant just as natural resources return to centre stage. Investors have already chosen sides: Glencore shares jumped, Rio's fell. Intel popped after a presidential pat on the back, and General Motors took a bruising $6bn charge to unwind parts of its electric-vehicle ambitions. Across Asia-Pacific, markets have been upbeat. Japan rebounded, China and Hong Kong edged higher, and South Korea's rally continues unperturbed. Europe is mostly in the green.

Today's economic highlights:

See the full calendar here.

  • Dollar index:98,802
  • Gold: $4,472
  • Crude Oil (BRENT): $62.08 (WTI) $57.86
  • United States 10 years: 4.18%
  • BITCOIN: $90,362

In corporate news:

  • Reliance Jio is preparing for a potential $4.5 billion IPO in 2026, aiming to list 2.5% of the company if regulatory changes are approved.
  • Johnson & Johnson reached a deal with the U.S. government to lower drug prices in exchange for tariff exemptions and plans to invest $55 billion in U.S. manufacturing.
  • Nvidia appointed former Google executive Alison Wagonfeld as its first Chief Marketing Officer.
  • Walt Disney CEO Bob Iger met with China's Vice Premier in Beijing to discuss expanding investment in the country.
  • xAI, Elon Musk's AI startup, spent $7.8 billion in the first nine months of 2025 and plans to invest over $20 billion in a Mississippi data center opening in February 2026.
  • Chevron ramped up loading of Venezuelan oil to its fastest pace in seven months due to near-full storage in Venezuela.
  • Rivian is recalling 19,641 vehicles due to potentially faulty rear toe link bolts that may cause crashes.
  • China's Commerce Ministry is reviewing Meta's acquisition of AI firm Manus for possible export violations.
  • China will approve limited imports of Nvidia's H200 AI chips for commercial use but not for government or military applications.
  • Rio Tinto and Glencore are in talks to merge, potentially forming the world's largest mining company valued over $200 billion.
  • Taiwan's 2025 exports hit a record $640.75 billion driven by strong AI-related chip demand.
  • China's car sales may stagnate in 2026, with the country's EV export boom likely to lose momentum.
  • General motors will record $7.1 billion in Q4 impairments, including $6 billion related to its EV division.
  • Intel was praised by Trump after a meeting with Lip-Bu Tan, now referred to by him as the highly effective CEO of the company.
  • Apple removed the age limit for two of its board members, including the chairman.
  • Eli lilly said that a combination of Taltz and Zepbound showed superior effectiveness in a phase 3b trial for arthritis and obesity.
  • Boeing has moved the B737 Max 10 to the next phase of FAA flight testing, according to The Air Current.
  • Verisk sold its marketing solutions business to Activeprospect.

Analyst Recommendations:

  • Airbnb, Inc.: Wells Fargo upgrades to market weight from underweight and raises the target price from USD 118 to USD 128.
  • Altria Group, Inc.: UBS upgrades to buy from neutral and raises the target price from USD 61 to USD 63.
  • American Tower Corporation: BMO Capital Markets downgrades to market perform from outperform and reduces the target price from USD 210 to USD 185.
  • Cleveland-Cliffs Inc: Morgan Stanley upgrades to overweight from market weight with a price target raised from USD 12.80 to USD 17.
  • Crowdstrike Holdings, Inc.: Berenberg upgrades to buy from hold with a target price of USD 600.
  • Donaldson Company, Inc.: Jefferies upgrades to buy from hold and raises the target price from USD 92 to USD 120.
  • Equity Residential: BMO Capital Markets downgrades to market perform from outperform and reduces the target price from USD 70 to USD 68.
  • Marriott International, Inc.: BMO Capital Markets upgrades to outperform from market perform and raises the target price from USD 285 to USD 370.
  • Mattel, Inc.: Goldman Sachs downgrades to neutral from buy with a target price of USD 21.
  • Nucor Corporation: Morgan Stanley downgrades to market weight from overweight and raises the target price from USD 165 to USD 180.
  • On Holding Ag: Williams Trading LLC downgrades to hold from buy and reduces the target price from USD 55 to USD 47.
  • Qualcomm, Inc.: Mizuho Securities downgrades to neutral from outperform and reduces the target price from USD 200 to USD 175.
  • Quanta Services, Inc.: Seaport Global upgrades to buy from neutral with a target price of USD 503.
  • Regency Centers Corporation: Mizuho Securities downgrades to neutral from outperform and reduces the target price from USD 77 to USD 74.
  • Rpm International Inc.: JP Morgan upgrades to overweight from neutral and reduces the target price from USD 117 to USD 115.
  • Siteone Landscape Supply, Inc.: RBC Capital upgrades to outperform from sector perform with a target price of USD 151.
  • Sotera Health Company: Piper Sandler & Co upgrades to overweight from neutral with a price target raised from USD 17 to USD 24.
  • Steel Dynamics, Inc.: Morgan Stanley downgrades to market weight from overweight and raises the target price from USD 173 to USD 194.
  • Zillow Group, Inc.: Mizuho Securities downgrades to neutral from outperform and reduces the target price from USD 100 to USD 70.
  • American Airlines Group Inc.: Barclays maintains its equalweight recommendation and raises the target price from USD 12 to USD 16.
  • Applied Materials, Inc.: Cantor Fitzgerald maintains its overweight recommendation and raises the target price from USD 350 to USD 425.
  • Fedex Corporation: Bernstein maintains its market perform recommendation and raises the target price from USD 250 to USD 306.
  • Sandisk Corporation: Mizuho Securities maintains its outperform recommendation and raises the target price from USD 250 to USD 410.