Stock prices rise due to strong December employment statistics

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Stocks rebounded on Friday as investors digested stronger labor market data that weighed on interest rate cut expectations.

The Dow Jones Industrial Average (^DJI) rose 0.3%, or about 120 points. The benchmark S&P 500 Index (^GSPC) rose 0.5%, and the tech-heavy Nasdaq Composite Index (^IXIC) rose 0.6%. Despite the morning gains, the stock is poised to end its nine-week winning streak.

The major indicators initially diverged after the release of December’s U.S. jobs report. The report showed the U.S. economy added 216,000 jobs in December, more than economists expected by 175,000. The unemployment rate remained unchanged at 3.7%.

Stocks fell in the first week of 2024, a notable reversal from a strong rally fueled by expectations that the US Federal Reserve would soon begin monetary easing. But traders are scaling back bets on a rate cut in March as questions arise about whether policymakers are prepared to change policy.

After Friday’s jobs report, investors were roughly 50-50 expecting the Fed to cut interest rates by March, according to CME Group data, a sharp drop from last month.

read more: Impact of the Fed’s interest rate hike suspension on bank accounts, CDs, loans, and credit cards

Against this backdrop, US Treasury yields continued to rise, with the 10-year Treasury yield (^TNX) rising 3.7 basis points to 4.04% after spiking on Thursday.

Elsewhere, iPhone supplier Foxconn (2354.TW) said it expects sales to decline in the first quarter due to slowing market demand. Apple (AAPL) stock fell in pre-market trading, with losses widening after two analysts downgraded the iPhone maker over concerns about sales of its next smartphone.

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Friday, January 5, 2024, 8:10pm (GMT+5:30)

Stocks rise slightly after strong jobs report surprised Wall Street

Stocks opened slightly higher on Friday as investors searched for direction after a strong jobs report dented expectations for a Federal Reserve interest rate cut.

The surprisingly strong jobs report could put pressure on the Fed to keep interest rates on hold and delay its first rate cut, potentially discouraging hopes that the tightening campaign is over.

The Dow Jones Industrial Average (^DJI) rose just above the flatline. The benchmark S&P 500 Index (^GSPC) rose 0.3%, and the tech-heavy Nasdaq Composite Index (^IXIC) rose 0.2%.
Friday, January 5, 2024, 7:15 PM GMT+5:30

US economy adds 216,000 jobs in December, stocks fall

The U.S. economy added 216,000 jobs in December, while the unemployment rate remained flat at 3.7%, according to the Bureau of Labor Statistics.

Yahoo Finance’s Josh Schafer has the details here.

Stocks fell on the news as traders scaled back bets that the Federal Reserve would cut interest rates. All three indexes fell more than 0.4% in pre-market trading.