Wall Street bounced back on Friday as chip stocks recovered from Thursday’s steep sell-off and a stronger-than-expected jobs report reassured investors about the economy — even as the same data fuelled bets that the Federal Reserve will raise interest rates in December.
Key Points
- The Nasdaq rose 1.09% to 24,579.42 and the S&P 500 gained 0.31% to 7,376.86; the Dow slipped 0.46% to 51,285.73.
- The US economy added 165,000 jobs in October, far above the 59,000 expected; unemployment fell to 4.1%.
- Markets now price in a 78% chance of a December Fed rate hike.
- Despite Friday’s rebound, the Nasdaq still posted its fourth straight weekly decline.
The recovery came a day after the Nasdaq plunged 5.5% in its worst session in 19 months, wiping about $3 trillion off Wall Street as investors feared tougher artificial intelligence rules after the Democrats’ midterm sweep. On Friday, dip-buyers returned: the Philadelphia Semiconductor Index jumped 4.21%, with Nvidia, AMD, Intel and Micron all advancing, and Tesla rising 4.23%. Microsoft was the notable exception among the biggest technology stocks, falling 0.99% on reports that it is gradually winding down its arrangement to rent AI computing power from Oracle.
A jobs report that cut both ways
The Department of Labor reported that the US economy added 165,000 jobs in October, far outperforming consensus estimates of around 59,000, while the unemployment rate ticked down to 4.1%. The strength of the report reassured investors that the economy remains resilient, but it also raised concerns that the Federal Reserve will feel emboldened to raise rates again: markets now price in a 78% chance of a December hike, and the yield on the US 10-year Treasury rose to 4.86%. The report also showed wage growth holding steady, a detail traders read as further evidence that the labour market is cooling only gradually.
Oil prices ticked higher, with December West Texas Intermediate crude rising to $90.83 a barrel, while gold slipped to $4,079.50 an ounce. Bitcoin traded at $75,812. The mixed session left the Nasdaq with a fourth consecutive weekly loss, underlining how fragile sentiment remains after a week dominated by the midterm result, the AI sell-off and the war in Iran.
What happens next
Investors will now watch the Federal Reserve’s December meeting for confirmation of the rate-hike bets, and the coming week’s Anthropic IPO roadshow for a test of whether Wall Street rebounds can hold after the sell-off. For Thursday’s rout, see our report on the Nasdaq plunging 5.5% as the AI sell-off wiped $3 trillion off Wall Street, and for the earlier jobs picture, US private payrolls rising 86,000 in October. More in our Business section.
Sources: The Economic Times, “Stock Market Highlights: US stocks rebound, but Nasdaq posts fourth straight weekly decline”; Binance News, “US Market Close: Mixed Close as Chip Stocks Rebound”.