Stock Market Today: Wall Street Reaches New Heights After Jobs Report

U.S. stocks experienced a notable uptick on Friday as data revealed that the job market is robust enough to support economic growth, yet not so strong as to heighten concerns about inflation. The latest jobs report showed that U.S. employers hired more workers than anticipated last month, but the unemployment rate climbed slightly to 4.2% from 4.1%.

The S&P 500 index rose by 0.2%, surpassing the record high set earlier in the week, and marking its third consecutive week of gains. This trend positions the S&P 500 on track for one of its strongest annual performances since the 2000 dot-com bust. In contrast, the Dow Jones Industrial Average fell by 0.3%, while the Nasdaq composite index surged by 0.8%, reaching a new all-time high of its own.

Market trading was relatively subdued following the mixed jobs report, which bolstered traders' hopes that the Federal Reserve may opt to cut interest rates at its upcoming meeting in two weeks. According to Lindsay Rosner, head of multi-sector investing at Goldman Sachs Asset Management, "This print doesn’t kill the holiday spirit and the Fed remains on track to deliver a cut in December."

The Federal Reserve has been working to lower its main interest rate from a two-decade high, which it initiated in September to provide support for the cooling job market while managing inflation close to its 2% target. Although lower interest rates can stimulate economic activity, they can also contribute to inflationary pressures.

Expectations for ongoing rate cuts from the Fed have contributed to the S&P 500 achieving an unprecedented 57 all-time highs this year. Simultaneously, rate reductions have been part of a wider global trend, with 62 central banks lowering rates in the past three months, marking the most significant activity since 2020, as noted by strategists like Michael Hartnett at Bank of America.

Despite these positive indicators, some caution remains evident within the jobs report. Scott Wren of Wells Fargo Investment Institute highlighted that average wages for workers rose slightly more than economists had predicted. While this is beneficial for workers, stronger wages can also place upward pressure on inflation, prompting the Fed to maintain a careful approach. Wren stated, "This report tells the Fed that they still need to be careful as sticky housing/shelter/wage data shows that it won’t be easy to engineer meaningfully lower inflation from here in the nearer term."

Currently, traders are estimating an 85% chance that the Fed will implement a rate cut in two weeks, but they remain uncertain about the future trajectory of additional cuts. Nonetheless, there is hope that a stable job market will encourage U.S. consumers to continue spending, which is essential to avoiding a recession that once seemed likely as the Fed aggressively increased rates to combat inflation.

Several retailers have reported positive results for the most recent quarter, reflecting resilience in the sector. For instance, Ulta Beauty saw shares increase by 9% after exceeding profit and revenue expectations, bolstered by the opening of new stores and an upgraded sales forecast for the year.

Similarly, Lululemon shares surged by 15.9% following a report indicating strong sales, particularly outside the U.S., with earnings surpassing analyst estimates. However, the retail environment remains mixed, as companies like Target have issued less optimistic forecasts for the holiday shopping season compared to Walmart’s more positive outlook.

A report released on Friday indicated that consumer sentiment in the U.S. may be improving more than anticipated by economists, with preliminary findings from the University of Michigan’s survey showing its highest reading in seven months. This surge in sentiment was accompanied by increased consumer purchasing as some anticipate possible price hikes due to tariffs suggested by President-elect Donald Trump.

In the technology sector, shares of Hewlett Packard Enterprise rose by 10.6% after reporting stronger-than-expected profit and revenue results. Technology stocks have shown considerable strength this week, with companies like Salesforce benefiting from the growing interest in artificial intelligence.

In conclusion, the S&P 500 added 15.16 points to close at 6,090.27. The Dow fell by 123.19 points to 44,642.52, while the Nasdaq composite climbed by 159.05 points to reach 19,859.77. In the bond market, the yield on the 10-year Treasury note slipped to 4.15% from 4.18%. Stock markets abroad also showed varied performance, with France’s CAC 40 rising by 1.3% following political stability announcements from President Emmanuel Macron.

In Asia, indexes presented mixed results, rallying in Hong Kong and Shanghai ahead of an annual economic policy meeting, while South Korea’s Kospi saw a decline amid political tensions affecting President Yoon Suk Yeol.

Lastly, Bitcoin hovered around $101,500 after previously reaching an all-time high of above $103,000.

Stocks, Market, Economy, Inflation, Retail