4 hrs ago
Nasdaq Hits Intraday Record as Softer Jobs Cool Rate Bets
US stocks went up on Friday, and the Nasdaq reached a record during the day.
A government report said employers added 29,000 jobs last month, fewer than economists expected.
Earlier job totals were also revised down.
This made traders less likely to expect the Federal Reserve to raise interest rates later in October.
Lower rate expectations helped some smaller companies and property-related stocks.
Nvidia and Tesla helped lift the broader market.
But Nike shares fell after it warned that sales would weaken, and hard-drive makers also lost value.
One investor said the market’s good mood came with worries about the economy and inflation.
US stocks rose Friday after employers added 29,000 jobs last month, below economists’ 90,000 estimate, and earlier hiring figures were revised sharply lower.
The Nasdaq Composite reached an intraday record; by the reported afternoon figures it was up 1.14% at 27,179.15.
Traders’ estimated chance of a Federal Reserve rate increase later in October fell to 23.8%, from 24.4% the prior session and 64.2% a week earlier.
Small-cap stocks and rate-sensitive sectors gained, while the Russell 2000 rose about 1% and was on track for its biggest daily gain in a month.
Nike fell 4.5% after forecasting weaker annual revenue, while Western Digital and Seagate dropped after a report that Toshiba plans to expand hard-drive production.
- Who
- US employers, investors, the Federal Reserve, and publicly traded companies including Nvidia, Tesla and Nike.
- What
- US stock indexes advanced, with the Nasdaq reaching an intraday record, after weaker jobs data reduced rate-hike expectations.
- Where
- US financial markets, including New York.
- When
- Friday, October 2; the article does not specify the year.
- Why
- The jobs report was weaker than expected, leading traders to lower their expectations of a near-term Federal Reserve rate increase.
Reasons for optimism
Reasons for caution
Weaker hiring and interest rates
Reasons for optimism
The weaker jobs report reduced expectations of a near-term rate increase, helping stocks and rate-sensitive shares.
Reasons for caution
A trader said the figures also raised concerns about the economy and inflation, describing the market mood as cautious optimism.
Market rally
Reasons for optimism
The Nasdaq reached an intraday record, and the Russell 2000 was on track for its strongest daily gain in a month.
Reasons for caution
The same trader cautioned that a short-term rally could be a 'hated rally'; the Dow and S&P 500 were also on pace for a fourth weekly decline in five.
Key facts
- Jobs added
- 29,000 last month, compared with a 90,000 estimate in a Reuters poll
- Dow Jones Industrial Average
- Up 0.43% to 51,143.70 in the reported afternoon figures
- S&P 500
- Up 0.70% to 7,720.44 in the reported afternoon figures
- Nasdaq Composite
- Up 1.14% to 27,179.15; reached an intraday record
- October rate-hike probability
- 23.8%, down from 24.4% the prior session and 64.2% a week earlier, according to CME FedWatch
- Russell 2000
- Gained about 1% and was on track for its biggest daily gain in a month
- Notable declines
- Nike fell 4.5%; Western Digital fell about 10% and Seagate Technology about 11%
Quotes
Robert Bernstone
Head of trading at SummitTX Capital in New York
“Today's news was OK insofar as it means the economy isn't roaring. But how good is that? Yes, it's fine insofar as it takes the short-term rate hike off, but there is a concern over the economy, there is a concern over inflation, so cautious optimism is kind of where people are.”
livemint.com
“But with that said, a potential squeeze into the end of the year, or at least for the next month or two, could happen just because it's a hated rally.”
livemint.com
Sources
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