Jamie Spencer
U.S. markets climbed on Friday as traders digested resilient jobs data and grew more confident in the likelihood of another Federal Reserve rate cut. All three major indexes opened in the green, buoyed by November’s strong hiring numbers and easing fears of an economic downturn.
Key Market Movements
Here’s where U.S. indexes stood shortly after the 9:30 a.m. opening bell on Friday:
- S&P 500: 6,091.75, up 0.27%
- Dow Jones Industrial Average: 44,867.15, up 0.28% (-124.26 points)
- Nasdaq Composite: 19,773.11, up 0.39%
Bond yields also dipped as optimism over continued economic growth outweighed concerns about inflation.
November Jobs Report: A Boost for Markets
The Bureau of Labor Statistics reported that the U.S. economy added 227,000 jobs in November, exceeding expectations of 220,000 and significantly rebounding from October’s weaker payroll figures. However, the unemployment rate rose slightly to 4.2% from 4.1%.
Bryon Anderson, head of fixed income at Laffer Tengler Investments, noted, “After a prior month of hurricanes and worker strikes, we did get a bounce back in the headline payroll numbers plus positive revisions.”
The stronger-than-expected jobs report alleviated recession fears, strengthening market bets on a 25-basis-point rate cut at the Fed’s December meeting.
Fed Rate Cut Odds Climb
According to the CME FedWatch tool, the likelihood of a December rate cut rose to 87% on Friday, up from 71% the previous day. Markets are also pricing in a 27% chance of an additional quarter-point cut in January, up from 20%.
Chris Zaccarelli, chief investment officer at Northlight Asset Management, stated, “Given the positive backdrop of strong economic growth, a healthy labor market, and inflation that is relatively contained, the Fed can keep cutting rates and that should allow the bull market to run into the end of the year and into early next year.”
Commodities and Treasury Yields
Other key market movements included:
- West Texas Intermediate (WTI) Crude Oil: Fell 1% to $67.62 a barrel.
- Brent Crude: Dropped 0.98% to $71.38 a barrel.
- Gold: Declined 0.81% to $2,631.08 an ounce.
- 10-Year Treasury Yield: Fell four basis points to 4.138%.
The Big Picture
With strong job growth, a stable labor market, and contained inflation, investors remain optimistic about continued economic momentum heading into 2024. However, uncertainty lingers over whether the Fed’s rate-cutting cycle will pause next year.
As markets react to evolving economic data and Fed decisions, traders and analysts will keep a close eye on inflation metrics and labor trends to gauge the outlook for monetary policy and market performance.
