According to reports from reuters.com, US equities climbed on Friday, sending the Nasdaq Composite to an all-time high, as Treasury yields dropped and the likelihood of a near-term rate increase diminished following disappointing jobs data, while a decline in oil prices further bolstered the risk-on atmosphere.
Nasdaq Hits Record High on Labor Department Jobs Report
Friday’s employment report from the Labor Department indicated that nonfarm payrolls grew by 29,000 jobs last month, with figures for the previous two months seeing significant downward revisions. Economists polled by Reuters had forecast payrolls advancing 90,000.
The lower jobs print, including the revision, is good news for stocks, according to Todd Schoenberger, chief investment officer at CrossCheck Management. Schoenberger stated that with the bond market organically doing the job of the Federal Reserve recently, the market needed to sacrifice a headline metric and this morning’s report accomplished that goal.
Compared to the 26% probability before the report, traders now estimate a 20% chance that the Federal Reserve will raise rates by 25 basis points in October. The yield on the two-year Treasury note retreated for the second straight day.
Semiconductor Stocks and Major Technology Firms Lift Indexes
Semiconductor stocks and megacaps led the gains on Friday. Nvidia touched an intraday record high, up 2.5%, while the Philadelphia chip index firmed 3.1%, reuters.com reported.
Among other heavyweights, SpaceX added 5.5%, Tesla gained 4.1%, and Oracle rose 3%. Ten out of 11 major sectors on the S&P 500 traded higher, with consumer discretionary and the technology index leading the gains, while the healthcare index stood as the only laggard.
At 10:14 a.m. ET, the Dow Jones Industrial Average rose 306.78 points, or 0.60%, to 51,233.34. The S&P 500 rose 1.02% or 78.31 points to 7,744.76, while the Nasdaq Composite climbed 1.66% or 447.84 points to 27,319.43.
Nike Forecasts Surprise Revenue Drop Due to China Weakness
Reuters.com reports that Nike dropped 5.6% after the US sportswear firm announced global business division restructuring, job cuts, and an unexpected sharp decline in annual revenue projections resulting from weakness in China.
Regarding other equity movements, Fair Isaac, a credit-scoring firm, declined 1.5% following a Bloomberg News report that the US Federal Housing Finance Agency intends to relax mortgage credit data requirements for Freddie Mac and Fannie Mae. In a reflection of general risk-on sentiment, bitcoin rose 3.4%, and Strategy and Coinbase each climbed nearly 3.1%.
Market Volatility Gauge and Oil Prices Decline
Reuters.com reported that Brent crude prices fell below $100 a barrel after news emerged that the European Union had discussed releasing further crude and diesel stocks, contributing to positive market sentiment despite a lack of new updates on resolving the Middle East conflict.
The Cboe Volatility Index, often called Wall Street’s fear gauge, hit a one-week low and was last trading down at 15.67 points. Advancing issues outnumbered decliners by a 3.27-to-1 ratio on the New York Stock Exchange, and by a 2.5-to-1 ratio on the Nasdaq.
Questions About the October Federal Reserve Meeting
What probability do traders currently assign to an October rate hike?
Traders assign a 20% probability that the Federal Reserve will hike rates by 25 basis points in October, down from 26% prior to the Labor Department’s employment report.
How much did nonfarm payrolls increase last month?
Nonfarm payrolls increased by 29,000 jobs last month, while the numbers for the prior two months were revised sharply lower by the Labor Department.
Where did Brent crude prices trade following European Union discussions?
Following reports that the European Union discussed releasing additional crude and diesel stocks, Brent crude prices dropped below $100 a barrel.