The November jobs data was marginally better than anticipated, but not enough to prevent the Federal Reserve from lowering interest rates later this month. As a result, the S&P 500 and Nasdaq Composite climbed to new highs on Friday.
At 6,090.27, the broad market S&P 500 increased by 0.25%. The tech-heavy Nasdaq saw increases in Tesla, Meta Platforms, and Amazon, which helped it rise 0.81% to 19,859.77. During the day, both indexes reached fresh all-time highs and ended the session at record highs. The Dow Jones Industrial Average closed at 44,642.52, down 123.19 points, or 0.28%.
Additionally, the S&P 500 and Nasdaq had gains of 0.96% and 3.34%, respectively, for their third consecutive week of gains. Over that time, the Dow fell 0.6%.
Nonfarm payrolls rose by 227,000 last month, according to the November labor report, which was made public Friday morning. This was a significant increase above October’s upwardly revised gain of 36,000 and higher than the Dow Jones estimate of 214,000. As anticipated, the jobless rate increased slightly to 4.2%.
According to the CME Group’s sFedWatch Tool, fed funds futures trading data showed an 85% chance of another rate decrease in two weeks after the not-too-hot, not-too-cold jobless report.
Luke O. Neill, portfolio manager at Catalyst Funds, stated that traders are more confident in the 25 basis-point rate decrease at the next meeting since they are witnessing a labor market that is not weak but is undoubtedly softening.
“It’s not a gangbuster, but we’re doing pretty well economically, and there’s enough softening on the labor side to give the Fed plenty of cover to lower rates here,” he added.
Fed Chair Jerome Powell has previously stated that policymakers do not need to be in a rush to decrease rates given the ongoing strength of the U.S. economy.
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