US stocks witnessed a mixed performance on Friday as investors closely analyzed the last monthly jobs report of the year. This crucial data point holds significant implications for the prospects of interest rate cuts in December and beyond. The Dow Jones Industrial Average (^DJI) saw a slight decline of about 0.3%, while the S&P 500 (^GSPC) rose by roughly 0.3%. Meanwhile, the tech-heavy Nasdaq Composite (^IXIC) experienced a more substantial increase of 0.8%, with Amazon (AMZN), Apple (AAPL), and Meta (META) reaching all-time intraday highs.Weekly Performance and Market Sentiment
The daily results of the major stock gauges also reflected their weekly performances. The Dow shed 0.6% for the week, while the S&P 500 gained close to 1%. The Nasdaq, on the other hand, climbed more than 3%. This week's market movements were influenced by the jobs report, which provided a mixed picture of the US economy. The economy added 227,000 jobs in November, slightly more than expected, and the unemployment rate unexpectedly ticked up to 4.2%. This data largely matched hopes for a "Goldilocks" reading - strong enough to ease concerns about the economy but soft enough to keep the Fed's options open for lowering rates this month and into next year.Impact on Fed Rate Cut Expectations
On Friday, markets were pricing in near-90% odds of a Fed rate cut by a quarter percentage point on Dec. 18, according to the CME FedWatch Tool. This indicates a significant shift in market expectations compared to about 70% before the report. The jobs report seemed to reinforce the belief that the Fed will continue its accommodative stance to support economic growth. Traders are now eagerly awaiting the next inflation reading, which could potentially alter the current storyline.Bitcoin's Rally and Crypto Outlook
The rally in bitcoin (BTC-USD) continued after a brief dip, trading around $101,000 on Friday afternoon. Options suggest that some investors are hedging against a deeper pullback after the leading token's record-breaking surge to over $100,000 for the first time. The rally in bitcoin has been fueled by hopes of support for digital currencies from President-elect Donald Trump. He named former PayPal (PYPL) COO David Sacks as his "White House AI & Crypto Czar," which has injected confidence into the crypto market.Corporate Earnings and Stock Movements
On the corporate front, shares of Lululemon (LULU) and Ulta Beauty (ULTA) jumped after the retailers both boosted their profit forecasts. Lululemon's strong third-quarter results and raised full-year revenue forecast led to a significant surge in its stock price. Ulta Beauty also beat third-quarter earnings estimates and raised its forecasts for full-year earnings, resulting in a 10% increase in its share price. Additionally, shares of several other companies were in focus during afternoon trading. Palantir (PLTR) rose more than 5% after signing a new AI partnership with defense contractor Booz Allen Hamilton (BAH). Shopify (SHOP) gained 5% following an upgrade from Loop Capital. These stock movements highlight the influence of various factors on the market.Appeals Court Decision and TikTok's Future
Shares of Facebook's parent company Meta (META) rose nearly 3% following a US appeals court decision that upheld a law banning TikTok from operating in the US under Chinese ownership. The decision could be overturned by the Supreme Court, and TikTok's future remains uncertain. In addition to legal challenges, there is also the unknown of what President-elect Trump could do. His statements on the campaign trail suggest he may try to influence the impact of the law. This situation creates uncertainty in the digital advertising space and poses a challenge for TikTok and its competitors.Afternoon Trading Trends and Market Sentiment
During afternoon trading on Friday, several stocks were leading Yahoo Finance's trending tickers page. Lululemon's shares soared on the back of strong results, while Palantir and Shopify also saw significant gains. These trends indicate the market's focus on specific companies and sectors. The Nasdaq's pop in afternoon trading was driven by several Big Tech names hitting intraday highs, including Amazon, Apple, and Meta. This shows the continued strength of the tech sector and its impact on the overall market.Jobs Report and Fed's Next Move
A jobs report that largely matched expectations sent stocks higher in afternoon trading. The labor market rebound, although not a major surprise, provided some reassurance to investors. The unemployment rate's unexpected tick up to 4.2% did not dampen the market's optimism. Robert Sockin, Citigroup's senior chief economist, believes that this report keeps the Fed on track to cut interest rates by another quarter percentage point later this month. However, the robust jobs picture and recent stickiness in inflation reinforce the view that the pace of rate cuts in 2025 will be less aggressive than initially expected.Consumer Sentiment and Inflation Expectations
The latest consumer sentiment survey from the University of Michigan showed that consumers expect inflation to hit 2.9% in a year, an increase from last month. This indicates growing concerns about inflation. However, expectations for long-run inflation slipped slightly. Overall, consumer views on inflation vary based on political party, with Democrats expressing concerns about policy changes and Republicans expecting a slowdown. The survey also showed a large increase in buying conditions for durable goods, which boosted current economic conditions.
