On Friday, stocks rebounded as investors processed a significant shortfall in the monthly jobs report and reacted positively to earnings from Amazon and Intel. The Nasdaq Composite, heavily influenced by technology stocks, climbed by 0.8%, while the S&P 500 increased by 0.4%, both recovering from concerns related to the artificial intelligence expenditures of major tech companies. The Dow Jones Industrial Average experienced a rise of approximately 0.7%.
Nonetheless, despite Friday’s recovery, all three indices recorded weekly losses. The U.S. economy added only 12,000 jobs in October, a figure that fell short of expectations. Authorities pointed to the recent hurricanes and strike actions, particularly at Boeing, as contributing factors to the disappointing statistics.
This report constitutes the final major release of economic data before the Federal Reserve’s forthcoming policy meeting scheduled for Nov. 7. Market outlooks for this gathering have stabilized, with traders calculating nearly 99% likelihood of a 25-basis point rate cut.
Meanwhile, positive earnings from Amazon alleviated some of the concerns surrounding the outlook of major tech firms, which had driven the stock market decline on Thursday. Shares of Amazon surged more than 6%, following CEO Andy Jassy’s announcement of remarkable triple-digit revenue growth. Intel also contributed to market positivity with its impressive results.
Conversely, Apple shares declined after a mixed earnings report was released. Boeing’s stock saw a slight increase as the company reached an agreement to resolve a significant strike involving factory workers, resulting in a 38% wage increase. The contentious presidential election looms just a few days ahead.
Election Day will underline an economic calendar filled with significant corporate earnings reports and a Federal Reserve meeting that is largely anticipated to lead to another rate reduction. On the earnings side, several major players in the entertainment industry, such as Sony, Warner Bros. Discovery, and Paramount, are slated to report.
Amazon’s earnings boost market morale
Companies in the shared economy, including Airbnb and Lyft, are also set to announce earnings, following this week’s positive release from Uber. Investors will be keenly watching the upcoming Fed decision slated for Thursday.
Market forecasts indicate a high probability that the central bank will implement a 25 basis point interest rate cut, marking the second consecutive decrease, albeit smaller than the 50 basis point reduction observed in September. How the Fed will navigate a cooling labor market is a pivotal question for policymakers. This anticipated move will likely carry additional weight as it occurs just two days post-election.
Trump Media & Technology Group’s stock plummeted over 10% on Friday, concluding a tumultuous week characterized by multiple trading halts and notable fluctuations as the presidential election approaches. Throughout the week, the stock declined by about 20%, yet it remains above its September lows. The volatility of shares, swinging between highs and lows, is expected to persist as Election Day draws closer.
The last jobs report before the election highlighted a labor market affected by weather disruptions and strikes. While the White House, along with Kamala Harris’ supporters, emphasized the chaotic nature of the report, the Trump campaign leveraged the underwhelming figures, alleging deception without substantiation. The jobs report has emerged as a prominent topic in the closing days of the 2024 election cycle.
Wall Street extended its early gains on Friday afternoon as investors reacted positively to Amazon’s robust earnings, propelling major indices towards daily increases. The Nasdaq Composite surged by 1.1%, and the S&P 500 rose by 0.9%. The Dow Jones Industrial Average experienced a gain of almost 1.1%, positioning itself for a weekly victory.
Quarterly reports from Amazon and Google’s parent company, Alphabet, provided strategic insights for investors anticipating results on extensive infrastructure investments. Alphabet reported earnings that exceeded analysts’ projections, buoyed by significant growth in its cloud sector. Despite investor impatience regarding the tech sector’s large-scale investments in AI technology, Google and Amazon demonstrated that their core business profitability can mitigate those apprehensions.
However, Microsoft and Meta faced a less favorable reception, as investors reacted negatively, causing both stocks to decline despite announcing strong earnings.
