Stocks climbed on Friday as investors welcomed a key monthly jobs report that showed hiring remains robust in the US economy. The Middle East crisis and a return to work at US ports also stayed in high focus.
The S&P 500 (^GSPC) put on 0.5%, while the Dow Jones Industrial Average (^DJI) added 0.4%. The tech-heavy Nasdaq Composite (^IXIC) moved 0.6% higher.
The September jobs report massively overshot expectations, as the US economy added 254,000 jobs last month and the unemployment rate dipped down to 4.1%. All together, the report showed the labor market remains robust, even amid signs it has cooled. Yahoo Finance’s Josh Schafer has more details on the report here.
The jobs report swung forecasts toward a smaller interest-rate cut from the Federal Reserve next month. Over 90% of bets are on a 25 basis point cut, as opposed to a larger 50 basis point cut, according to the CME FedWatch Tool.
Read more: What the Fed rate cut means for bank accounts, CDs, loans, and credit cards
Stocks are looking to recoup weekly losses, as the markets have shown some resilience in the face of a rough week of worrying headlines. The major gauges were off 1% or less as of Thursday’s close, with the S&P 500 and Dow still within striking distance of record highs.
In recent days, a huge ports strike, devastation from Hurricane Helene, and the prospect of a wider Mideast conflict brought the potential to lift prices and fan inflation.
In a welcome move, the US dockworkers strike ended after a tentative wage deal was agreed late Thursday, though some issues remain to be settled by later this year.
On the downside, a barrage of strikes by Israel on Beirut kept alive the Mideast worries that have driven up oil prices. Western leaders warned about “uncontrollable escalation” as investors waited to see whether Israel will attack Iran’s oil facilities — a move President Biden said is under discussion.
Oil is on track for its biggest weekly gain in two years as tensions mount. Brent crude (BZ=F) and West Texas Intermediate (CL=F) futures rose 0.8% on Friday morning, coming off a 5% gain the previous day.
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Stocks trending in morning trading
Here are some of the stocks leading Yahoo Finance’s trending tickers page during morning trading on Friday:
Rivian (RIVN): Shares of the electric-vehicle maker fell 7% Friday morning after the company cut its production forecast for the year and fell short of delivery expectations because of slowing growth in demand and a parts shortage.
Spirit Airlines (SAVE): The budget carrier fell nearly 25% Friday after the Wall Street Journal reported that the company has been in discussions with bondholders over a potential bankruptcy following its failed merger with JetBlue (JBLU).
Meta (META): The social media company rose 0.5% following an announcement that it has developed a new AI model, in competition with OpenAI, that can generate video and audio based on prompts from users. Dubbed Movie Gen, the model will also allow users to edit existing videos through text inputs. according to a company blog post.
CVS (CVS): Shares of the pharmacy chain rose nearly 3% following an analyst upgrade from TD Cowen, moving the stock from a “Hold” to a “Buy,” based on changes to its Medicare Advantage plan for 2025, which the company announced earlier this week.
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Stocks rise after massive jobs report beat
Investors embraced a hugely encouraging jobs reportt Friday that showed hiring remains robust in the US economy.
The S&P 500 (^GSPC) put on 0.7%, while the Dow Jones Industrial Average (^DJI) added roughly 0.6%. And the tech-heavy Nasdaq Composite (^IXIC) moved 1.1% higher.
The labor market added 254,000 payrolls in September, more additions than the 150,000 expected by economists, according to data from the Bureau of Labor Statistics. The unemployment rate fell to 4.1%, from 4.2% in August.
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Markets move to price in less Fed easing after strong jobs report
A far stronger-than-expected September jobs report has tilted markets to price in fewer interest rate cuts from the Federal Reserve in 2024.
Following the report, markets were pricing in a roughly 10% chance the Fed cuts interest rates by half a percentage point in November, down from a 53% chance seen a week ago, per the CME FedWatch Tool.
Robert Sockin, Citi senior global economist, told Yahoo Finance that the better-than-expected jobs report makes it less likely that the Fed moves with the “urgency” it did at its September meeting, when the central bank cut interest rates by half a percentage point.
“This pushes the Fed out a lot,” he said, adding that it’s uncertain the Fed will make another 50 basis point cut again this year.
“Looking at the labour market strength evident in September’s employment report, the real debate at the Fed should be about whether to loosen monetary policy at all,” Capital Economics chief North America economist Paul Ashworth wrote in a note to clients on Friday. “Any hopes of a [50 basis point] cut are long gone.”
Read more: Jobs, inflation, and the Fed: How they’re all related
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September jobs report crushes expectations as US economy adds 254,000 jobs, unemployment rate falls to 4.1%
The US labor market added far more jobs than projected in September while the unemployment rate unexpectedly ticked lower, reflecting a far stronger picture of the jobs market than Wall Street had expected.
Data from the Bureau of Labor Statistics released Friday showed the labor market added 254,000 payrolls in September, more additions than the 150,000 expected by economists.
Meanwhile, the unemployment rate fell to 4.1%, from 4.2% in August. September job additions came in higher than the revised 159,000 added in August.
