US stock futures are slightly softer this morning, as investors weigh strong services activity against cooler hiring signals and what that could mean for interest rates. The ISM Services PMI rose to 54.4 in December 2025, a level that points to solid growth in areas like healthcare, finance and travel, while price pressures in the survey eased a bit, hinting that inflation may be calming. At the same time, ADP private payrolls showed a modest 41,000 job gain and job openings sat at a 14 month low, which points to a job market that is still healthy but less hot. With the US 10 year Treasury yield around 4.14%, the big question for investors is whether this mix of firm services spending and cooler hiring will persuade the Federal Reserve to cut rates later in 2026. Any such move could be a key swing factor for interest rate sensitive sectors such as real estate and utilities, as well as growth focused areas like technology and smaller company stocks that often react quickly to changing borrowing costs.
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With earnings quiet, macro and labor data around services, jobs and wages are setting the tone for US trading.
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US services strength: Fresh ISM Services PMI at 54.4, on Thursday, helps you gauge demand across finance, travel and healthcare.
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Labor market cooling: Softer ADP payrolls and lower job openings, on Thursday, spotlight hiring momentum and wage pressure trends.
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US inflation pulse: Easing ISM services prices and factory orders pullback, on Thursday, frames how quickly price pressures may cool.
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Rate sensitivity check: US 10 year yield near 4.14%, on Thursday, keeps mortgage, credit and equity discount rates in focus.
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Energy and inflation link: US crude inventory draw with higher gasoline and distillates, on Thursday, feeds into fuel costs and margins.
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Instead of chasing every headline, focus on undervalued stocks based on cash flows that our research flags right now. Solid cash flow profiles help set these companies apart when borrowing costs shift again.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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