US EQUITY OPEN: Stocks green after NFP as eyes turn to potential opinions on ...

US EQUITY OPEN: Stocks green after NFP as eyes turn to potential opinions on tariffs from SCOTUS

• Utilities sector outperforms as Meta's power purchase boosts nuclear stocks.
• Rising yields follow mixed NFP data; Dollar strengthens, Yen weakens.
• Market eyes Supreme Court's impending decision on Trump's tariffs.

Stocks opened in positive territory, with the Russell index leading gains. The Utilities sector emerged as the standout performer, climbing 1.5% after Meta Platforms (META) announced plans to purchase power from three Vistra (VST) plants in the United States. This move has sparked interest in nuclear stocks, as Meta also collaborates with Oklo (OKLO) to develop small modular reactors (SMRs), potentially signalling a broader shift towards sustainable energy sources.

In contrast, the Consumer Discretionary sector remained flat, reflecting a cautious market sentiment amid mixed economic signals. The latest Non-Farm Payrolls (NFP) report showed a headline figure of 50,000, falling short of the anticipated 60,000. However, the unemployment rate dipped to 4.4% from a revised 4.5%, suggesting a resilient labour market. This data prompted a rise in Treasury yields, with T-notes declining as investors adjusted their expectations for future interest rate movements.

The currency markets reacted to these developments with the US Dollar firming, while the Japanese Yen lagged. Reports of Japanese Prime Minister Takaichi considering dissolving the lower house, with elections potentially scheduled for early to mid-February, added to the Yen's weakness. Traders are closely monitoring these political developments, which could influence currency volatility in the coming months.

Commodities also saw upward momentum, with oil and metal prices gaining. This reflects a broader market optimism, possibly driven by expectations of sustained demand and geopolitical factors. Attention now turns to the Supreme Court's forthcoming opinions on President Trump's tariffs, which could have significant implications for trade policies and market dynamics.

In stock-specific news, Merck (MRK) is reportedly in discussions to acquire Revolution Medicines (RVMD) for $28–32 billion, highlighting ongoing consolidation in the pharmaceutical sector. Insmed (INSM) exceeded revenue guidance for FY25, while WD-40 (WDFC) reported disappointing profit and revenue figures. AXT (AXTI) revised its Q4 revenue outlook downward, and Qualcomm (QCOM) faced a downgrade from Mizuho to 'Neutral'. Conversely, CrowdStrike (CRWD) received an upgrade from Berenberg to 'Buy', reflecting positive sentiment in the cybersecurity space.

Trader Insight:

• Traders are observing the Utilities sector, particularly Vistra (VST) and Oklo (OKLO), for potential gains following Meta's power purchase announcement.
• Market participants are monitoring US 10-Year Treasury yields for further movements post-NFP report.
• Currency traders are assessing USD/JPY dynamics amid Japanese political developments.
• Energy traders are watching WTI crude oil prices for continued upward trends.
• Investors are considering the impact of potential Supreme Court decisions on trade-related stocks and sectors.

Disclaimer: This is not trading advice. For informational purposes only.