Market Snapshot: U.S. stocks end mixed, but book weekly gains as strong jobs data challenges Fed to push interest rates higher

by | Dec 2, 2022 | Stock Market

U.S. stocks ended mostly lower Friday on signs that the U.S. labor market remained robust in November despite the Federal Reserve’s interest-rate hikes. Data released by the Labor Department showed the U.S. economy added more jobs than economists had expected, bolstering the perception that the Fed still has a long way to go before its rate hikes produce their intended effect of cooling the labor market, and inflation with it.

How stocks traded
The Dow Jones Industrial Average
rose 34.87 points, or 0.1%, to close at 34,429.88.

The S&P 500
slipped 4.87 points, or 0.1%, to finish at 4,071.70.

The Nasdaq Composite
dropped 20.95 points, or 0.2%, to end at 11,461.50.

All three major benchmarks booked a second straight week of gains, according to Dow Jones Market Data. Stocks had soared on Wednesday with the Dow climbing more than 700 points in the wake of Fed Chairman Jerome Powell’s remarks about the likelihood that the Fed will downshift to a 50 basis point interest-rate hike later this month. What drove markets Stocks mostly fell Friday as investors digested a stronger-than-anticipated jobs report, with the S&P 500 finishing slightly lower but still up for the week. The U.S. economy added 263,000 new jobs in November, beating expectations for 200,000 jobs, which would have been the lowest monthly number since December 2020. The prior month’s reading was also revised higher to 284,000. “The market’s hanging in here better than I would have initially thought” given the strength of the jobs report, said Scott Wren, senior global market strategist at Wells Fargo Investment Institute, in a phone interview Friday. He said that sometimes “what’s good for the economy is bad for the market because of the implications” for how aggressively the Fed may react to cool demand through interest rate hikes. The market’s decline Friday reflected concerns that a strong jobs report means that inflation may stay elevated for longer and the Fed’s terminal rate may wind up higher than expected, Wren said. Stocks fell as shorter-term Treasury yields …

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