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U.S. stocks wavered in early trade on Friday after the Labor Department showed the U.S. economy added more jobs than economists’ had expected in November. The data pushed back against expectations that the Federal Reserve could cut interest rates aggressively in 2024.
What’s happening
-
The Dow Jones Industrial Average
DJIA
was up 63 points, or 0.2%, at 36,177. -
The S&P 500
SPX
gained 3 points, or 0.1%, to 4,589. -
The Nasdaq Composite
COMP
fell by 7 points, or 0.1%, to 14,331.
On Thursday, the Dow Jones Industrial Average rose 63 points, or 0.17%, to 36117, the S&P 500 increased 36 points, or 0.8%, to 4586, and the Nasdaq Composite gained 193 points, or 1.37%, to 14340.
The S&P 500 has been in the tightest trading range in the last two years over the last two weeks, according to Goldman Sachs.
What’s driving markets
The November jobs report came in hotter than expected, as auto workers restarted hiring following the conclusion of major national strikes. This sparked an initial selloff in stocks, and and an even bigger one in bonds, as investors bet the data could undercut expectations for multiple Fed rate cuts in 2024.
However, the initial move lower in stock futures has mostly unwound after the open, with the main indexes trading mixed, with the Dow higher and Nasdaq lower.
Data from the Labor Department showed the U.S. economy created 199,000 jobs in November, surpassing economists’ expectations for 190,000 new jobs. The unemployment rate also retreated to 3.7%, after jumping to 3.9% in October.
See: U.S. Added 199,000 Jobs in November
“Overall, this NFP release puts the Fed in a wait-and-see mode, there’s no rush to cut rates with this strong employment market – in fact, it might be premature,” Giuseppe Sette, president of Toggle AI, said in emailed commentary.
The S&P 500 has retreated this week, although it remains close to a 20-month high. Expectations that the Fed could cut interest rates aggressively next year have helped propel stocks and bonds higher in recent weeks. Before that, the market capped off a three-month-long losing streak in October.
“The reason for the newfound optimism is the widespread expectation that the Fed has finished its job,” said Effy Elfenbein, the portfolio manager of the AdvisorShares Focused Equity ETF and blogger of Crossing Wall Street.
Treasury yields jerked higher after the jobs report, unwinding some of the swing higher that had taken place over the past month. The yield on the 10-year Treasury note
BX:TMUBMUSD10Y
was up 6 basis points at 4.209%. Bond yields move inversely to prices, climbing as prices fall, and vice versa.
Next week may be equally important, with key inflation data, Treasury auctions and a Federal Reserve interest-rate decision all due.
Companies in focus
-
Lululemon Athletica Inc.
LULU,
+3.49%
traded higher after the company late Thursday called for lower-than-expected holiday-quarter figures, saying that it has navigated an “uncertain” economy. -
Carrier Global Corp.’s
CARR,
+5.37%
stock jumped after the company announced the sale of its Global Access Solutions business to Honeywell International for $4.95 billion. -
Mullen Automotive Inc.’s stock
MULN,
-1.03%
rose 2.9% early Friday, after the electric vehicle maker filed a lawsuit against a group of investors for allegedly using “spoofing” to manipulate its share price.
