Stock Market Today: Indexes Rise as Jobs Report Fuels Rate Cut Hopes
The stock market showed positive momentum on Friday, December 6, 2024, as investors digested the latest jobs report and its implications for future interest rate decisions. Major indexes climbed higher, building on the record-setting performance earlier in the week.
Market Performance
As of midday trading:
– The S&P 500 (^GSPC) rose 0.37% to 6,097.33
– The Dow Jones Industrial Average (^DJI) gained 0.10% to 44,811.54
– The Nasdaq Composite (^IXIC) increased 0.72% to 19,842.36
These gains come after all three major indexes reached all-time closing highs on Wednesday, driven by enthusiasm for artificial intelligence and expectations of potential interest rate cuts .
Jobs Report and Rate Cut Expectations
The U.S. Labor Department released the highly anticipated November jobs report, which showed the economy added 227,000 jobs, slightly above the expected 215,000 . The unemployment rate unexpectedly ticked up to 4.2% from 4.1% .
This “Goldilocks” report – neither too hot nor too cold – has fueled optimism about potential interest rate cuts. The data suggests a resilient labor market that’s cooling gradually, potentially giving the Federal Reserve room to consider easing monetary policy .
Market sentiment reflects increased confidence in a December rate cut, with the CME FedWatch Tool now indicating a 90% probability of a quarter-point reduction, up from 71% the previous day .
Corporate News and Stock Movements
Several companies made headlines with significant stock movements:
1. Lululemon (LULU): Shares surged 17.22% after the athletic apparel retailer boosted its profit forecast .
2. American Airlines (AAL): The stock soared 15% following an upward revision of its fourth-quarter adjusted earnings forecast .
3. Southwest Airlines (LUV): Gained 3.9% after raising its forecast for fourth-quarter revenue per available seat mile .
4. Tesla (TSLA): The electric vehicle maker’s stock rose 1.33%, buoyed by price target increases from at least two brokerages .
5. Synopsys (SNPS): Shares fell 10.7% after the chip design software firm forecasted fiscal 2025 revenue below Wall Street expectations, partly due to a slump in China sales .
Cryptocurrency and Blockchain Sector
The cryptocurrency market experienced a notable milestone as Bitcoin briefly surpassed the $100,000 mark for the first time. However, it has since retreated to around $98,000 . This achievement comes amid growing institutional interest and potential policy support from the incoming administration.
President-elect Donald Trump’s recent appointment of former PayPal (PYPL) COO David Sacks as the “White House AI & Crypto Czar” has sparked optimism about future support for digital currencies .
Looking Ahead
As the market digests the latest economic data and corporate earnings, investors are keeping a close eye on upcoming events that could impact trading:
1. Federal Reserve’s next interest rate decision on December 18
2. Upcoming comments from Richmond Fed President Thomas Barkin
3. The University of Michigan’s preliminary consumer sentiment index for December, due later today
Market Outlook
The stock market’s performance in 2024 has been largely driven by enthusiasm for AI-related stocks and expectations of a more accommodative monetary policy. However, some analysts caution that the market may need to reassess its optimism about rapid rate cuts.
Eric Clark, portfolio manager at the Rational Dynamic Brands Fund, noted, “They [the Fed] have already hinted about being very slow and methodical about cutting interest rates … at some point the market will probably make that realization and put things that were tied to rate cuts on sale” .
As we move towards the end of 2024, investors will be closely monitoring economic indicators, corporate earnings, and Federal Reserve communications to gauge the market’s direction in the coming months.
