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Dow Surges 300 Points Following a Weak Jobs Data, on Track for Its Greatest Week Since October 2022

Stocks increased on Friday, capping the greatest week for the stock market in 2023, after a weak employment report caused bond yields to decline.

0.9%, or 305 points, were added to the Dow Jones Industrial Average. The Nasdaq Composite up 1.4% and the S&P 500 up 1.1%.

Stocks are expected to rise significantly this week as investors become more optimistic that the Federal Reserve’s campaign of rate hikes will come to an end. The Dow was heading into its greatest week since October 2022, up almost 5%. The S&P 500 is headed for its first five-day winning run since June, up more than 6%. Over 6% gained on the Nasdaq.

The October jobs data, which was released on Friday, proved that the Federal Reserve’s efforts to curb inflation and cool the economy may be having some effect. The United States economy added 150,000 jobs last month, which was less than the 170,000 payrolls gain consensus projection from Dow Jones and less than the stunning 297,000 job additions in September. Contrary to predictions that it would remain stable at 3.8%, the jobless rate increased to 3.9%.

In October, average hourly wages increased by 0.2% instead of the expected 0.3%, which was a monthly decline from forecasts.

This reading, according to Michelle Cluver, portfolio strategist at Global X, “takes some of the burden off inflation and interest rate concerns from an equity market viewpoint, while still indicating a vibrant labour market that is adding jobs faster than the neutral rate of about 100K.”

The poorer-than-expected payroll data and smaller average hourly wages gain on Friday sent bond yields, which have been a drag on the stock market for the past three months, plunging. From its peak of 5% last month, the yield on the 10-year Treasury fell by more than 9 basis points to 4.57%. The yield on the 2-year Treasury fell to 4.9%, a loss of 7 basis points.

Source (CNBC)

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