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U.S. stocks are rising after December jobs report eases rate fears

Published 01/06/2023, 09:40 AM
Updated 01/06/2023, 11:03 AM
© Reuters.

© Reuters.

By Liz Moyer

Investing.com -- U.S. stocks rallied after jobs data showed a cooling labor market, easing investor concerns about rising interest rates.

At 11:01 ET (16:01 GMT), the Dow Jones Industrial Average was up 518 points or 1.6%, while the S&P 500 was up 1.5% and the NASDAQ Composite was up 1.4%.

Futures had already jumped after December’s jobs report showed a slightly cooling labor market, with average hourly earnings dipping lower. Investors were hoping for signs the labor market was slowing down, which could encourage the Fed to ease off its pace of interest rate increases.

Still the report was slightly stronger than expected. Nonfarm payrolls rose 223,000 last month, below November’s pace but beating the consensus forecast for 200,000. The unemployment rate dipped to 3.5% compared with the 3.7% expected. That puts the jobless rate at a 50-year low.

Average hourly earnings rose 0.3% against expectations for 0.4%.

Worries about a still-tight labor market weighed on stocks in recent days as investors feared the Fed had reasons to keep inflation higher for longer. Fed officials have said they expect rates to rise above 5%, emphasizing the need to keep rates elevated to combat inflation. Investors have been hoping for a pause or eventual pivot.

The Fed next meets in February, when it is expected to raise rates by a quarter of a percentage point. That would be a slower pace than the half-point hike in December and the three-quarter percentage point hikes at each of the four meetings before that.

Tesla Inc (NASDAQ:TSLA) shares were falling 1.3% after the electric vehicle maker cut prices in China for the second time in less than three months. Bed Bath & Beyond Inc (NASDAQ:BBBY) shares also tumbled, falling another 16.8% on Friday after telling investors it was considering options including bankruptcy.

Silvergate Capital Corp (NYSE:SI), a crypto bank, also saw shares falling 9.6% after JPMorgan said rising withdrawals are a reason for concern. The analysts cut their rating to neutral from overweight. 

Oil rose. Crude Oil WTI Futures were up 1.6% to $74.88 a barrel while Brent Oil Futures were up 1.3% to $79.78 a barrel. Gold Futures were up 1.4% to $1867.

Latest comments

Fake
Nonsense, market just over reacted to hourly earnings drop. Labor markets still pretty tight.
Decide what you want to read from data, here you say no Rate hike fear due to modest job data and for crude you say Strong job data.. Contradicting your own claims
Flip flop. Most probably writers having dementia.
"here you say no Rate hike"  --  Please quote us where this article says that.
"eases rate fears" means lower; doesn't necessarily mean "no Rate hike fear"
This good news is bad for the growth stocks. Nasdaq will reverse end of the day or wake up on Monday and reverse. Watch!
25 bps
And how is this supposed to be good for the market? Lower unemployment rates are what gives the FED reason to go even high with their rate hikes. The lower average hourly earnings is the only positive thing for the market and yet is the difference far too small to be noticable. JP said that they don't really care too much about the loans, so this should be bearish overall.
The article makes no sense
And how is this supposed to be good for the market? Lower unemployment rates are what gives the FED reason to go even high with their rates. The lower average hourly earnings is the only positive thing for the market and yet is the difference far too small to be noticable. JP said that they don't really care too much about the loans, so this should be bearish overall.
 Perhaps, however, the unemployment rate was expected to be higher, especially when considering the tech sector, where lots of job losses were stated publicly. Comparing the average salaries of the US with any other country in EU, it would only be natural for the hourly average returns to drop by a decent amount. Not as little as it did here. With the incredible raise of AI, we might be able to see a new economic boom in the tech sector, making it difficult to sustain the inflation in the upcoming years. I don't see how this is the end of the current sentiment. UK still suffers from 20% inflation according to truflation and deflation slows down. It would appear there is still some pain ahead and if the market doesn't give in, nor will the FED. The inflation lag increments slow down. One thing that marks a potential end to hikes are the "T10Y2Y" / "T10Y3M" charts, but I am not invested too much in this treasury topic to be able to deduce it's true meaning /
  Inflation & GDP are much bigger reasons for the Fed to raise/lower rates than yield spreads or low unemployment rate.
But yesterday they were afraid of fed tightening. Ridiculous
Market veterans know the market changes its assessment all the time.
Keep buying. When selling starts you will see. Do not fight the fed.
USA don't manufacture anything, all go from China. Without NIO is not Tesla. All going out so all investors go to China
Don't manufacture anything? Thanks for your super secret information, Einstein.
 Of couse, I will do it and translation will be different as I was lazy to translate. Example: Zelensky let killed his own people told old grandma he is not my president - translation from google was: Old grrandma killing her own people and president Zelensky is great. So FO
Wall street always enjoys when workers make less money than they expected. Apparently even more than people lose jobs.
Criminally pumped just enough to whisk away yesterday's loss, as the Wall Street gang manufactures another fraudulent "rally."  First weekend of the New Year, and Wall Street is totally content to send American into it with another financial knife in the back.  Welcome to the first Friday FRAUD of 2023, as the biggest investment JOKE in world history defrauds the US working class in broad daylight.
They defraud not only US working class but whole of the world
"first Friday FRAUD" --  Everyday is a fraud to you.
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