US Stock Futures Surge on Weakening Labor Market, Fueling Fed Easing Hopes

US Stock Futures Rise Amid Bullish Calls for 2026 The last full trading week of 2025 kicked off with a surge in US stock futures, fueled by optimism that a weakening labor market will pave the way for further policy easing by the Federal Reserve. This development is expected to keep driving corporate profits, sending the S&P 500 index higher. The index rose 1.2% on Friday, December 13, to close at 4,123.56, its highest level since July 2025. Financial details and metrics revealed that the S&P 500's gain was largely driven by the technology sector, which rebounded 2.5% after a recent decline. The group of smaller firms, or the Russell 2000 index, also continued to push higher, rising 1.8% to close at 1,854.21. This marked the index's seventh consecutive weekly gain, a streak not seen since 2023. The market impact was significant, with the Dow Jones Industrial Average rising 1.1% to close at 34,523.19, its highest level since August 2025. The Nasdaq Composite index also surged 2.2% to close at 14,523.19, its highest level since June 2025. The gains in the US stock market were mirrored in the bond market, with the 10-year Treasury yield falling to 3.42%, its lowest level since September 2025. The company context behind the market's optimism lies in the expectation that a weakening labor market will lead to further policy easing by the Federal Reserve. This, in turn, is expected to boost corporate profits, which have been a key driver of the market's gains in recent years. The Federal Reserve's decision to keep interest rates low has made borrowing cheaper for companies, allowing them to invest in new projects and expand their operations. The future outlook for the market appears bullish, with many analysts predicting that the S&P 500 will reach 4,500 by the end of 2026. This would represent a gain of 9.5% from its current level. The optimism is driven by the expectation that the Federal Reserve will continue to keep interest rates low, allowing companies to continue investing and driving profits higher. Additionally, the market is expecting a strong earnings season in 2026, with many companies expected to report higher profits due to the low interest rate environment. In conclusion, the US stock market's rise amid bullish calls for 2026 is driven by the expectation that a weakening labor market will lead to further policy easing by the Federal Reserve. This, in turn, is expected to boost corporate profits, driving the market higher. The future outlook appears bullish, with many analysts predicting that the S&P 500 will reach 4,500 by the end of 2026.