Wall Street’s main indexes edged higher on Friday, with the S&P 500 and the Nasdaq touching intraday record highs as traders increased bets on a Federal Reserve rate cut this month following robust November payrolls data.
US job growth surged in November after being severely constrained by hurricanes and strikes. However, this is unlikely to signal a material shift in labour market conditions, which continue to ease steadily and would allow the Fed to cut interest rates again this month.
“This jobs report came out right in the Goldilocks zone — not too hot to derail interest-rate cuts in December (or next year), but also not too cold, which could have spooked financial markets about the underlying health of the US economy,” said Josh Jamner, investment strategy analyst, ClearBridge Investments.
Traders boosted bets the US central bank would cut interest rates this month, now signalling a more than 90% chance of a 25-basis-point rate cut at the Fed’s upcoming Dec 17-18 meeting, versus 67% before the release of the jobs report.
Meanwhile, a preliminary reading of the University of Michigan’s US consumer sentiment survey stood at 74 in December, compared with an estimate of 73, according to economists polled by Reuters.
At 10:01 am ET, the Dow Jones Industrial Average rose 49.46 points, or 0.11%, to 44,815.17, the S&P 500 gained 22.11 points, or 0.36%, to 6,097.33, and the Nasdaq Composite added 142.28 points, or 0.72%, to 19,843.00.
Most megacap and growth stocks rose, with Tesla and Amazon up 1.1% and 1.4%, respectively, pulling the Consumer Discretionary sector up 1.3% to a record high.
Lululemon Athletica also added 17.2% after the sportswear maker increased its full-year forecasts, betting on resilient demand for its athletic wear.
Fed officials including San Francisco president Mary Daly are scheduled to make public appearances through the day, on the eve of a media blackout that kicks in on Saturday in the run-up to the central bank’s Dec 17-18 policy meeting.
US stocks closed lower in the last session, with UnitedHealth down sharply and technology shares giving up some gains after a steady increase through the week.
Despite Thursday’s pullback, the S&P 500 and the Nasdaq were on track for their third consecutive weekly gains, while the blue-chip Dow was set for minor losses.
The three indexes have rallied this year as investors bought into heavyweight tech stocks, in a bid to cash in on the euphoria around artificial intelligence.
US President-elect Donald Trump’s win in the Nov 5 election has provided further tailwinds for stocks. Analysts expect his tax-cut policies and looser regulations to support corporate performance.
Ulta Beauty advanced 12.1% after the cosmetics retailer raised its annual profit forecast, signalling a revival in demand for perfumes and makeup during the holiday shopping season.
Advancing issues outnumbered decliners by a 1.81-to-1 ratio on the NYSE, and by a 1.97-to-1 ratio on the Nasdaq.
The S&P 500 posted 20 new 52-week highs and four new lows, while the Nasdaq Composite recorded 67 new highs and 37 new lows.
