The stock market saw gains across major indexes on Friday as November jobs data came in solid enough to support economic growth but not so hot as to deter the Federal Reserve from potentially cutting rates again. The S&P 500 climbed 0.25% to close at a record 6,090.27. The tech-heavy Nasdaq advanced 0.81% to 19,859.77, buoyed by gains in major technology stocks.
Both indexes reached new all-time highs during the session. The Dow Jones Industrial Average, however, slipped 123.19 points, or 0.28%, to close at 44,642.52. The S&P 500 and Nasdaq have now enjoyed their third straight positive week, rising 0.96% and 3.34%, respectively, while the Dow dipped 0.6% over the same period.
November’s labor report, released Friday morning, indicated that nonfarm payrolls increased by 227,000, surpassing the Dow Jones estimate of 214,000. This marks a considerable increase from October’s revised gain of 36,000. The unemployment rate edged up to 4.2%, aligning with expectations.
Given the unemployment data, fed funds futures trading reflected an 85% likelihood of another rate cut at the upcoming meeting, according to CME Group data. “You’re seeing a labor market that is not weak but is definitely softening, providing traders with more confidence in the anticipated rate cut,” said Luke O’Neill, portfolio manager at Catalyst Funds. Consumer behavior during Black Friday shifted considerably towards online shopping this year.
Bank of America’s economist Aditya Bhave noted that online retail spending increased by 7.9% relative to the same period last year, while brick-and-mortar retail experienced a 0.3% decline. The late Thanksgiving this year contributed to a shorter, more intense holiday shopping season. Bank of America’s December survey revealed continued high consumer expectations for purchasing new vehicles in the next 12 months.
Stock futures reach new record highs
According to the survey, 43% of respondents plan to buy new vehicles, up from 41% last year. Plans to purchase new appliances have ticked up slightly, while expectations to buy new homes decreased to 19% from 21% last month.
HSBC projects that the S&P 500 will reach 6,700 by the end of 2025, implying more than a 10% upside from Thursday’s close. Analyst Nicole Inui expects earnings growth to drive next year’s equity returns, supported by a resilient U.S. economy and some margin expansion. Inui also forecasts that the Federal Reserve will lower interest rates by another 125 basis points as inflation eases.
The video game sector is experiencing significant gains, with key stocks seeing strong performance. For example, several prominent firms in the sector have shown impressive weekly gains and are on track for record streaks. The soaring relative strength index, a popular technical indicator, suggests the sector might experience a pullback.
The South Korean won weakened 0.6% against the dollar, trading at 1,423.97 on Friday. This decline precedes the National Assembly’s vote on the impeachment of President Yoon Suk Yeol following the brief emergency martial law declaration earlier this week. The won has dropped 2% against the dollar since then.
Despite the looming threat of tariffs next year, UBS maintains a positive outlook on global equities. The firm advises investors to stay bullish, predicting favorable market conditions. Investor sentiment remains cautiously optimistic as markets continue to seek balance between economic growth and central bank policy moves.
The robust jobs data and consumer spending patterns indicate continued economic strength, while sector-specific surges highlight diverse investment opportunities.
