US stocks saw a significant decline on Friday, with the Dow Jones falling by 697 points. This drop followed a strong December jobs report, which led to reduced expectations for Federal Reserve interest rate cuts in 2025.

The report showed that the economy added 256,000 jobs last month, surpassing the forecast of 155,000. Additionally, the unemployment rate decreased from 4.2% in November to 4.1%. The positive labor market data caused bond yields to rise, with the 10-year US Treasury yield reaching its highest level since October 2023, peaking at 4.79%.

Market analysts now predict that the Fed will only implement one 25-basis point rate cut this year. However, some economists believe this projection may be too optimistic. Bank of America economists pointed out that inflation remains above target and economic activity remains strong, suggesting that the Fed's cutting cycle may be over. Wharton professor Jeremy Siegel shared this view, warning that the market is indicating a potential absence of rate cuts in 2025 and cautioning that higher bond yields could result in a correction in stock market valuations.