S&P 500 and Nasdaq Surge to Record Highs Following Strong Jobs Report

December 8, 2024
Paul Svensen

U.S. stock markets experienced a significant boost on December 6, 2024, as the S&P 500 and Nasdaq Composite reached record highs following the release of a robust jobs report for November. The report indicated that the economy added 227,000 jobs, surpassing expectations and reinforcing market optimism regarding potential interest rate cuts by the Federal Reserve.

Key Takeaways

The S&P 500 closed at 6,090.27, marking a new record high.
The Nasdaq Composite ended at 19,859.77, also achieving a record close.
The Dow Jones Industrial Average fell by 123.19 points, closing at 44,642.52.
The unemployment rate rose slightly to 4.2%.
Market expectations for a Federal Reserve rate cut increased significantly.

Strong Jobs Report Fuels Market Optimism

The U.S. economy’s addition of 227,000 jobs in November was a welcome surprise, especially following a disappointing October that saw only 36,000 jobs added. This rebound was attributed to various sectors, with notable gains in health care, leisure, and hospitality. The report’s results were seen as a "Goldilocks" scenario—strong enough to alleviate recession fears but soft enough to keep the Fed’s options open for rate cuts.

Market Reactions

S&P 500: Rose by 0.25% to close at 6,090.27.
Nasdaq Composite: Increased by 0.81% to finish at 19,859.77.
Dow Jones: Decreased by 0.28%, closing at 44,642.52.

The tech-heavy Nasdaq outperformed other indices, driven by gains in major technology stocks such as Amazon, Apple, and Meta, which all reached new intraday highs.

Federal Reserve Rate Cut Expectations

Following the jobs report, market analysts adjusted their expectations for the Federal Reserve’s upcoming meeting on December 18. The likelihood of a quarter-point rate cut rose to nearly 90%, up from about 70% prior to the report. This shift reflects growing confidence that the Fed will act to support the economy amid signs of a cooling labor market.

Sector Performance

The performance of various sectors in the S&P 500 highlighted the market’s dynamics:

Consumer Discretionary: Led the gains with a 5% increase.
Communication Services: Followed closely with a 4.1% rise.
Information Technology: Gained 3.4%.
Energy and Utilities: These sectors lagged, with declines of 4.3% and 3.9%, respectively.

Conclusion

The strong jobs report has not only propelled the S&P 500 and Nasdaq to new heights but has also set the stage for potential monetary policy shifts by the Federal Reserve. As investors digest these developments, the focus will remain on upcoming economic indicators, particularly inflation data, which could further influence market sentiment and Fed actions in the near future.