4:05pm: Stocks end week on positive note
US stocks were higher, led by the Nasdaq, at Friday’s closing bell as evidence the labor market is slowing supported optimism that the Fed’s rate hiking cycle is ending.
The Nasdaq had gained 1.4% or 184 points at 13,478 points, the S&P 500 was up 1% or 41 points at 4,358 points, and the Dow Jones was up 0.7% or 222 points at 34,061 points.
“It has been a storming week for equities, bolstered by cautious Fed comments (dovish would be too strong a word) and now by the signs of slowing US jobs growth,” IG chief market analyst Chris Beauchamp commented.
“Once more this puts investors in the odd position of being cheered by poorer economic figures, but markets are eager for signs that their belief that rates have passed their peak are correct.”
12:05pm: Wall Street headed for best week of 2023
US stocks were higher in noon trading after October’s employment report came in weaker than expected, adding 150,000 positions, which was 20,000 less than the economist consensus forecast.
At midday, the Dow gained 249 points to 34,088 while the S&P 500 added 43 points at 4,361 and the tech-heavy Nasdaq rose 156 points to 13,450.
"From an equity market perspective, this reading takes some of the pressure off inflation and interest rate concerns, while still reflecting a robust labor market that is adding jobs faster than the neutral rate of approximately 100K," Global X portfolio strategist Michelle Cluver said.
Notable movers included shares of Block Inc (NYSE:SQ), which jumped 12% after the financial technology company reported better-than-expected 3Q earnings and raised its full-year guidance.
9:50am: Stocks rally as weak payrolls backs likely rate pause
US stocks made strong early progress after weak non-farm payrolls figures backed expectations that interest rates have peaked.
Shortly after the opening bell, the Dow Jones Industrial Average was up 182.51 points, 0.5%, at 34,021.59, the S&P 500 was up 37.50 points, 0.9%, at 4,355.28 and the Nasdaq Composite was up 126.83 points, 0.9%, at 13,419.10.
Fawad Razaqzada at FOREX.com said: "Today’s publication of US jobs report has further cemented expectations that the Fed has reach peaked interest rates."
"Bond yields and the dollar have sold off as a result, with indices and gold moving higher."
James Knightley at ING agreed, noting: "Labour market numbers are always the last thing to turn in an economic cycle so the softening in employment and wage growth and the rise in the unemployment rate makes it all the more likely that the Federal Reserve won’t hike interest rates again."
8:40am: Non-farm payrolls cooler-than-expected
The US economy added 150,000 jobs in October, fewer than expected, and previous months were revised lower, suggesting interest rate rises may be starting to slow economic growth.
Economists had expected 180,000 new jobs. In September, employers hired 297,00 more people, less than the 336,000 previously reported, and in August, there were 165,000 new private sector jobs, revised down from 227,000.
The unemployment rate ticked up to 3.9% while average hourly earnings rose by or 0.2% month-on-month and by 4.1% on an annual basis.
Job gains occurred in health care, government, and social assistance while employment declined in manufacturing due to strike activity.
Stocks futures have jumped sharply with the softer data supporting the narrative that interest rates have peaked.
7:00am: US futures point to weak open ahead of non-farm payrolls
US stocks are expected to make subdued early progress although direction will likely be heavily influenced by non-farm payrolls figures before the opening bell.
In pre-market trading, futures for the Dow Jones Industrial Average were flat, while those for the S&P 500 were 0.1% lower, and contracts for the Nasdaq 100 futures fell 0.4%.
Economists expect the US to have added 180,000 jobs in October, a sharp drop from the surprise 336,000 added in September, keeping the unemployment rate at 3.8%.
Richard Hunter, head of markets at interactive investor, said: “As ever, the headline number will be critical in establishing the latest state of play.”
“A reading which conforms to consensus will provide further relief both to the Fed and to investors, while a hot reading would complicate the entire narrative once more, likely leading to higher yields and reigniting interest rate hiking concerns,” he added.
Elsewhere, US services sector growth is anticipated to have slowed slightly in October, with the Institute for Supply Management’s services purchasing managers’ index projected to tick down 0.6 percentage points to a reading of 53.
Stocks to watch include Apple which fell 3% in after-hours trading after the iPhone maker issued a weak revenue outlook for the December quarter.
This followed financial fourth quarter results which beat Street expectations for revenue and earnings despite sales falling for the fourth quarter in a row.
Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown said: “Apple has sounded the alarm over Christmas demand, in what could be taken as a sign of creaking consumer resilience.”
“Expectations for the crucial festive trading season were lower than analysts had hoped for, following a lacklustre performance for iPads and wearables.”