The November jobs report was somewhat 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 reached 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 jobs report, which was made public Friday morning. This was a significant rise above the upwardly revised gain of 36,000 in October and over the Dow Jones estimate of 214,000. As anticipated, the jobless rate increased slightly to 4.2%.
According to the CME Group’s FedWatch 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 unemployment report.
“What is giving traders more confidence in the 25 basis-point rate cut here at the upcoming meeting is that we are seeing a labor market that is not weak but is definitely softening,” said Luke O’Neill, portfolio manager at Catalyst Funds.
He stated, “It’s not gangbusters, but we’re doing fairly well economically, S&P 500 and there is enough softening on the labor side to give the Fed plenty of air cover to lower rates here.”
Fed Chair Jerome Powell has previously stated that policymakers do not need to be “in a hurry to lower rates” due to the ongoing strength of the U.S. economy.
