Jamie Spencer
On Friday, the Dow Jones Industrial Average rallied over 500 points in response to a weaker-than-expected jobs report, lifting stocks across the board by midday. The S&P 500 gained 0.9%, while the Nasdaq advanced by 1.2%, buoyed by recoveries in both tech and energy stocks. The small-cap Russell 2000 reversed Thursday’s losses, climbing 1.1%, while the Innovator IBD 50 ETF (FFTY) rose 1.5%.
S&P 500 and Nasdaq Rebound Amid Lower Trading Volume
The S&P 500 regained ground from its 50-day moving average, following Thursday’s dip below the 21-day line. Likewise, the Nasdaq climbed back to its 21-day moving average, led by notable tech stocks. Despite lower trading volume compared to Thursday, advancers led decliners nearly 2-to-1 across major exchanges, signaling broad support for the rally.
Small-cap stocks followed suit, with the Russell 2000 bouncing back from Thursday’s 1.6% drop. The upward movement underscores a resilient market, even as trading volume on the NYSE and Nasdaq remained subdued.
Mixed Performance in Individual Stocks: Winners and Losers
Among the day’s notable movers, Trump Media & Technology (DJT) plunged 7% as it entered a three-day losing streak, set to close the week with a 17% loss despite peaking at $54.68 on Tuesday. In contrast, Dorman Products (DORM) broke out of a flat base, buoyed by robust third-quarter results and an increased full-year earnings guidance of $6.90 per share, up from $6.10.
Tech stock Marvell Technology (MRVL) also made headlines, breaking out from a buy point at 85.76. Both DORM and MRVL saw their relative strength lines hit new highs, indicating potential momentum for continued gains.
Soft Jobs Report and Economic Indicators Point to Rate Cut
The U.S. economy added just 12,000 jobs in October, well below the forecasted 125,000, impacted by two hurricanes and a Boeing (BA) strike. August and September payroll data were also revised downward. This weak performance has increased expectations for a 25-basis-point rate cut at the Federal Reserve’s upcoming meeting, with the CME FedWatch Tool indicating a 99.5% probability of a cut on Nov. 7.
Economic indicators further pointed to a slowdown, as the Institute of Supply Management’s Manufacturing Index dropped to 46.5 in October from 47.2 in September, falling short of expectations. S&P Global’s manufacturing PMI slightly exceeded its preliminary reading, coming in at 48.5, yet remaining below the growth threshold.
Tech Giants Apple and Amazon See Divergent Reactions
Despite surpassing Wall Street’s estimates for earnings and revenue, Apple (AAPL) saw its shares dip further below the 50-day moving average. Apple reported earnings of $1.64 per share on $94.93 billion in revenue, but fell short on sales forecasts for the upcoming quarter, dampening investor enthusiasm.
Meanwhile, Amazon.com (AMZN) soared over 7% following a stellar third-quarter earnings report. Amazon posted $158.9 billion in revenue with earnings of $1.43 per share, beating analyst projections. Shares cleared a new buy point at 195.37, signaling investor optimism about Amazon’s future growth trajectory.
Energy and Industrial Stocks Make Gains Amid Positive Earnings
Energy giant Chevron (CVX) outperformed expectations with stronger-than-anticipated earnings and sales for the third quarter. Chevron’s shares broke past a buy point at 152.48, bolstered by a four-weeks-tight pattern. Boeing (BA) also rose as news surfaced of its third proposal to striking workers, potentially signaling an end to labor disruptions that have impacted its production schedules.
Among Dow leaders, chipmaker Intel (INTC) rebounded, regaining traction at the 50-day moving average. Intel’s optimistic earnings outlook for the coming quarter helped ease investor concerns and provided a boost to the tech-heavy Nasdaq.
Stock Market Moves Today: Atlassian Soars, Cboe and Berkshire Hathaway Adjust
Atlassian (TEAM) skyrocketed by 15% after announcing strong quarterly results and an upward revision of its sales guidance. Cboe Global Markets (CBOE), however, triggered a sell signal after its third-quarter report, slipping below its 50-day line in heavy trading.
Meanwhile, Berkshire Hathaway (BRKB) ticked up in anticipation of its Saturday earnings report. The stock remains below its 50-day moving average within a flat base, with a buy point set at 484.82. Investors are closely watching for insights from Berkshire’s report, particularly on its portfolio adjustments amid a shifting economic landscape.
A Look Ahead: Rate Cut Expectations Drive Market Sentiment
With soft employment numbers and slowing manufacturing indicators, the likelihood of a Fed rate cut next week has surged. As traders brace for potential adjustments in monetary policy, tech and energy stocks have emerged as focal points, providing stability amid market volatility. Investors will be watching closely for the Fed’s next moves, and with a 99.5% probability of a cut, a reduction in interest rates appears all but certain.
This market rally highlights a cautious optimism as investors weigh positive corporate earnings against a backdrop of economic uncertainty. With the end of the year approaching, the stock market’s resilience in the face of mixed economic data could set the stage for a compelling start to 2025.
