Dow rises 403 points in volatile session as investors assess strong jobs report and path of rate hikes
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- US stocks surged on Friday after a solid jobs report showed nonfarm payrolls jumping 261,000 in October.
- The unemployment rate rose to 3.7%, but the jobs report was likely not weak enough to change the Fed's interest rate hike plans.
- Stocks were also higher after new speculation that China would lift its COVID-19 restrictions.
US stocks closed sharply higher after volatile trading Friday on the release of the October jobs report, which showed nonfarm payrolls increased by 261,000 and the unemployment rate rose to 3.7%.
Economists had estimated monthly gains of just 193,000 in the month, underscoring just how resilient the labor market continues to be even as the Fed moves forward with aggressive interest rate hikes. The jobs report gave hope to a soft landing of the economy, but it also increased the likelihood of a Fed that remains aggressive with its rate hikes.
"The October Jobs Report likely wasn't what the Fed wanted to see. While the news is good for consumers — the labor market remains strong, and wages are increasing — these numbers don't suggest inflation is likely to slow at the rate the Fed is looking for," Orion Advisor Solutions CIO Rusty Vanneman told Insider.
Separately, growing speculation that China is on the verge of emerging from COVID-19-induced economic lockdowns helped drive stock prices, particularly Chinese stocks, higher.
Here's where US indexes stood at the 4:00 p.m. ET close on Friday:
- S&P 500: 3,770.59, up 1.36%
- Dow Jones Industrial Average: 32,404.80, up 1.26% (403.55 points)
- Nasdaq Composite: 10,475.25, up 1.28%
Here's what else happened today:
- Alibaba and other US-listed Chinese stocks pushed sharply higher Friday following separate reports that fueled further speculation that China is taking steps toward reopening its economy after strict COVID-19 lockdowns.
- US oil exports to Asia will hit record highs this month as the discount between American and other crude benchmarks widens, according to Kpler data cited by Reuters.
- More than 30 tankers carrying liquefied natural gas are idling off Europe's coast as traders hold out for higher market prices, the Financial Times reported.
- The Federal Reserve's latest jumbo interest rate hike will hobble the US housing market even further, Freddie Mac's chief economist has warned, even as mortgage rates fell back from their highest level in 20 years.
- Billionaire investor Ron Baron of Baron Capital said Tesla could surge to a valuation of $4.5 trillion over the next decade as it scales its auto business.
- The US Dollar Index shed more than 1.3% Friday amid about a potential easing of China's zero-COVID rules. The dip marked its steepest slide since March 2020, according to Bloomberg.
In commodities, bonds and crypto:
- West Texas Intermediate crude oil rose 5.05% to $92.62 per barrel. Brent crude, oil's international benchmark, jumped 4.16% to $98.61.
- Gold rose 3.24% to $1,683.70 per ounce.
- The yield on the 10-year Treasury rose 1 basis point to 4.16%.
- Bitcoin rose 3.48% to $21,027, while ether jumped 5.85% to $1,640.
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