Wall Street rises to records after the unemployment rate improves

NEW YORK (AP) — U.S. stocks hit records Friday following a mixed report on the U.S. job market, one that may delay another cut to interest rates by the Federal Reserve but does not slam the door on it.

The S&P 500 climbed 0.6% and topped its prior all-time high set earlier in the week. The Dow Jones Industrial Average added 237 points, or 0.5%, and likewise set a record, while the Nasdaq composite led the market with a 0.8% gain.

The moves came after the U.S. Labor Department said employers hired fewer workers during December than economists expected, though the unemployment rate improved and was better than expected. It reinforced how the U.S. job market may be in a “ low-hire, low-fire” state and may hopefully avoid a recession.

On Wall Street, power company Vistra soared 10.5% to help lead the market after signing a 20-year deal to provide electricity from three of its nuclear plants to Meta Platforms. Big Tech companies have been signing a string of such deals to electrify the data centers powering their moves into artificial-intelligence technology.

Oklo jumped 7.9% after saying it also signed a deal with Meta Platforms that will help it secure nuclear fuel and advance its project to build a facility in Pike County, Ohio.

Homebuilders and other companies involved in the housing market were strong in their first trading after President Donald Trump announced a plan to lower mortgage rates. Trump on late Thursday called for the purchase of $200 billion in mortgage bonds, similar to how the Fed in the past has bought bonds backed by mortgages to bring down mortgage rates.

Builders FirstSource, a supplier of building products, jumped 12% for one of the biggest gains in the S&P 500 along with Vistra. Among homebuilders, Lennar rallied 8.9%, D.R. Horton climbed 7.8% and PulteGroup rose 7.3%.

They helped offset a 2.7% drop for General Motors. The auto giant said it will take a $6 billion hit to its results for the last three months of 2025 related to its pullback from electric vehicles. That’s on top of the $1.6 billion in charges GM took in the prior quarter. Fewer tax incentives and easier fuel-emission regulations have been eating into demand for EVs.

WD-40 tumbled 6.6% after reporting a weaker profit for the latest quarter than analysts expected. Chief Financial Officer Sara Hyzer said the soft numbers were primarily because of timing issues, not weaker demand from end customers, and the company stood by its financial forecasts for the upcoming year.

All told, the S&P 500 rose 44.82 points to 6,966.28. The Dow Jones Industrial Average added 237.96 to 49,504.07, and the Nasdaq composite climbed 191.33 to 23,671.35.

In the bond market, Treasury yields were mixed.

Friday’s improvement in the unemployment rate was enough to get traders to ratchet back expectations for a cut to interest rates at the Fed’s next meeting, which is scheduled for later this month. Traders are now forecasting just a 5% chance of that, down from 11% a day before, according to data from CME Group.

But traders nevertheless still largely expect the Fed to cut rates at least twice this upcoming year.

Whether they’re correct carries high stakes for financial markets. Lower interest rates can goose the economy and push up prices for investments, though they can also worsen inflation at the same time. And inflation has stubbornly remained above the Fed’s 2% target.

“Until the data provide a clearer direction, a divided Fed is likely to stay that way,” according to Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management. “Lower rates are likely coming this year, but the markets may have to be patient.”

The yield on the 10-year Treasury eased to 4.16% from 4.19% late Thursday. It tends to track expectations for longer-term economic growth and inflation.

The two-year Treasury yield, which more closely tracks forecasts for what the Fed will do with short-term interest rates in the near term, rose to 3.53% from 3.49%.

A separate report released Friday morning suggested sentiment among U.S. consumers is strengthening, particularly among lower-income households. Perhaps more importantly for the Fed, the preliminary report from the University of Michigan also said expectations for inflation in the coming 12 months may be at their lowest level in a year. That could give it more freedom to cut interest rates.

Hopes for both lower interest rates and a solid economy have helped other areas of the stock market climb recently, wresting leadership away from the Big Tech and AI stocks that dominated the market for years. The smaller stocks in the Russell 2000, for example, climbed 4.6% this week, much more than the 1.6% rise of the S&P 500.

In stock markets abroad, indexes rose across much of Europe and Asia.

The French CAC 40 climbed 1.4%, and Japan’s Nikkei 225 jumped 1.6% for two of the world’s bigger gains.

AP Business Writers Chan Ho-him and Matt Ott contributed.

Christopher Lagana and James Denaro work on the floor at the New York Stock Exchange in New York, Friday, Jan. 9, 2026. (AP Photo/Seth Wenig)

Aman Patel works on the floor at the New York Stock Exchange in New York, Friday, Jan. 9, 2026. (AP Photo/Seth Wenig)

Daniel Kryger works on the floor at the New York Stock Exchange in New York, Friday, Jan. 9, 2026. (AP Photo/Seth Wenig)

Specialist Anthony Matesic works on the floor of the New York Stock Exchange, Thursday, Jan. 8, 2026. (AP Photo/Richard Drew)

Trader Anthony Confusione works on the floor of the New York Stock Exchange, Thursday, Jan. 8, 2026. (AP Photo/Richard Drew)

A dealer walks past near a screen showing the Korea Composite Stock Price Index (KOSPI) at a dealing room of Hana Bank in Seoul, South Korea, Thursday, Jan. 8, 2026. (AP Photo/Lee Jin-man)

A dealer watches computer monitors at a dealing room of Hana Bank in Seoul, South Korea, Thursday, Jan. 8, 2026. (AP Photo/Lee Jin-man)

A board above the trading floor of the New York Stock Exchange displays the closing number for the Dow Jones industrial average, Wednesday, Jan. 7, 2026. (AP Photo/Richard Drew)

A dealer walks past near the screens showing the Korea Composite Stock Price Index (KOSPI), left, and the foreign exchange rate between U.S. dollar and South Korean won at a dealing room of Hana Bank in Seoul, South Korea, Thursday, Jan. 8, 2026. (AP Photo/Lee Jin-man)

A dealer walks past near the screens showing the foreign exchange rates at a dealing room of Hana Bank in Seoul, South Korea, Thursday, Jan. 8, 2026. (AP Photo/Lee Jin-man)

DUBAI, United Arab Emirates (AP) — Protests sweeping across Iran reached the two-week mark early Sunday, with the country’s government acknowledging the ongoing demonstrations despite an intensifying crackdown and as the Islamic Republic remains cut off from the rest of the world.

With the internet down in Iran and phone lines cut off, gauging the demonstrations from abroad has grown more difficult. But the death toll in the protests has grown to at least 72 people killed and over 2,300 others detained, according to the U.S.-based Human Rights Activists News Agency. Iranian state TV is reporting on security force casualties while portraying control over the nation.

Supreme Leader Ayatollah Ali Khamenei has signaled a coming clampdown, despite U.S. warnings. Tehran escalated its threats Saturday, with the Iran’s attorney general, Mohammad Movahedi Azad, warning that anyone taking part in protests will be considered an “enemy of God,” a death-penalty charge. The statement carried by Iranian state television said even those who “helped rioters” would face the charge.

“Prosecutors must carefully and without delay, by issuing indictments, prepare the grounds for the trial and decisive confrontation with those who, by betraying the nation and creating insecurity, seek foreign domination over the country,” the statement read. “Proceedings must be conducted without leniency, compassion or indulgence.”

U.S. President Donald Trump offered support for the protesters, saying on social media that “Iran is looking at FREEDOM, perhaps like never before. The USA stands ready to help!!!”

The State Department separately warned: “Do not play games with President Trump. When he says he’ll do something, he means it.”

Saturday marked the start of the work week in Iran, but many schools and universities reportedly held online classes, Iranian state TV reported. Internal Iranian government websites are believed to be functioning.

State TV repeatedly played a driving, martial orchestral arrangement from the “Epic of Khorramshahr” by Iranian composer Majid Entezami, while showing pro-government demonstrations. The song, aired repeatedly during the 12-day war launched by Israel, honors Iran's 1982 liberation of the city of Khorramshahr during the Iran-Iraq war. It has been used in videos of protesting women cutting away their hair to protest the 2022 death of Mahsa Amini as well.

It also repeatedly aired video of purported protesters shooting at security forces with firearms.

“Field reports indicate that peace prevailed in most cities of the country at night,” a state TV anchor reported Saturday morning. “After a number of armed terrorists attacked public places and set fire to people’s private property last night, there was no news of any gathering or chaos in Tehran and most provinces last night.”

That was directly contradicted by an online video verified by The Associated Press that showed demonstrations in northern Tehran's Saadat Abad area, with what appeared to be thousands on the street.

“Death to Khamenei!” a man chanted.

The semiofficial Fars news agency, believed to be close to Iran's paramilitary Revolutionary Guard and one of the few media outlets able to publish to the outside world, released surveillance camera footage of what it said came from demonstrations in Isfahan. In it, a protester appeared to fire a long gun, while others set fires and threw gasoline bombs at what appeared to be a government compound.

The Young Journalists' Club, associated with state TV, reported that protesters killed three members of the Guard’s all-volunteer Basij force in the city of Gachsaran. It also reported a security official was stabbed to death in Hamadan province, a police officer killed in the port city of Bandar Abbas and another in Gilan, as well as one person slain in Mashhad.

The semiofficial Tasnim news agency, also close to the Guard, claimed authorities detained nearly 200 people belonging to what it described as “operational terrorist teams.” It alleged those arrested had weapons including firearms, grenades and gasoline bombs.

State television also aired footage of a funeral service attended by hundreds in Qom, a Shiite seminary city just south of Tehran.

Iran’s theocracy cut off the nation from the internet and international telephone calls on Thursday, though it allowed some state-owned and semiofficial media to publish. Qatar's state-funded Al Jazeera news network reported live from Iran, but they appeared to be the only major foreign outlet able to work.

Iran's exiled Crown Prince Reza Pahlavi, who called for protests Thursday and Friday, asked in his latest message for demonstrators to take to the streets Saturday and Sunday. He urged protesters to carry Iran's old lion-and-sun flag and other national symbols used during the time of the shah to “claim public spaces as your own.”

Pahlavi's support of and from Israel has drawn criticism in the past — particularly after the 12-day war. Demonstrators have shouted in support of the shah in some protests, but it isn’t clear whether that’s support for Pahlavi himself or a desire to return to a time before the 1979 Islamic Revolution.

Online video purported to show protests ongoing Saturday night as well.

The demonstrations began Dec. 28 over the collapse of the Iranian rial currency, which trades at over 1.4 million to $1, as the country's economy is squeezed by international sanctions in part levied over its nuclear program. The protests intensified and grew into calls directly challenging Iran's theocracy.

Airlines have canceled some flights into Iran over the demonstrations. Austrian Airlines said Saturday it had decided to suspend its flights to Iran “as a precautionary measure” through Monday. Turkish Airlines earlier announced the cancellation of 17 flights to three cities in Iran.

Meanwhile, concern is growing that the internet shutdown will allow Iran's security forces to go on a bloody crackdown, as they have in other rounds of demonstrations. Ali Rahmani, the son of Nobel Peace Prize laureate Narges Mohammadi who is imprisoned in Iran, noted that security forces killed hundreds in a 2019 protest “so we can only fear the worst.”

“They are fighting, and losing their lives, against a dictatorial regime,” Rahmani said.

Associated Press writers Oleg Cetinic in Paris and Kirsten Grieshaber in Berlin contributed to this report.

In this frame grab from video obtained by the AP outside Iran, a masked demonstrator holds a picture of Iran's Crown Prince Reza Pahlavi during a protest in Tehran, Iran, Friday, January. 9, 2026. (UGC via AP)

In this frame grab from video taken by an individual not employed by The Associated Press and obtained by the AP outside Iran shows a fire as people protest in Tehran, Iran, Friday, Jan. 9, 2026. (UGC via AP)

In this frame grab from video taken by an individual not employed by The Associated Press and obtained by the AP outside Iran shows people during a protest in Tehran, Iran, Friday, Jan. 9, 2026. (UGC via AP)

This frame grab from a video released Friday, Jan. 9, 2026, by Iranian state television shows a man holding a device to document burning vehicles during a night of mass protests in Zanjan, Iran. (Iranian state TV via AP)