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US Stocks Hit Record Highs on Improved Jobs Data
The US stock market reached new heights on Friday, with the S&P 500 and Nasdaq indexes hitting all-time highs, driven by strong performances from Tesla, Meta Platforms, and Amazon. The S&P 500 gained 0.25% to finish at 6,090.27, while the Nasdaq advanced 0.81% to 19,859.77. The Dow Jones Industrial Average, however, lost 123.19 points, or 0.28%, ending the day at 44,642.52.
The improved job market data for November showed nonfarm payrolls increasing by 227,000, surpassing the forecast of 214,000. The unemployment rate ticked up to 4.2%, in line with expectations. Despite this, analysts believe that the Federal Reserve will still cut interest rates later this month.
Incoming inflation data for November, including the Consumer Price Index (CPI) and Producer Price Index (PPI), are expected to be released next week. JPMorgan strategists anticipate a 0.3% increase in the core CPI index, which would likely support the Fed’s decision to cut rates.
On the earnings front, several notable companies, including Adobe and Broadcom, are set to report their financial results. Broadcom has delivered impressive performance this year, driven by strong growth in its AI compute and networking businesses. VMware, acquired by Broadcom over a year ago, is expected to achieve its $4 billion quarterly revenue run rate and $12 billion annual target.
Meanwhile, several analysts have set their expectations for the S&P 500 in 2025, with some predicting a 16.7% increase to 7,100. However, BCA Research warned of a potential bear market, citing a mild recession and softening jobs growth. UBS also predicted a potential correction in 1Q 2023 if data or policy disappoints.
Overall, despite some concerns about inflation and recession, the market has continued to rally, supported by positive economic data and central bank policy. However, investors remain cautious and are awaiting the release of inflation data and earnings results to determine the market’s next direction.
