Stocks staged a comeback on Friday as investors digested a big miss in the monthly jobs report and welcomed earnings from Amazon and Intel. The tech-heavy Nasdaq Composite gained 0.8%, while the S&P 500 rose 0.4%, recovering from worries about Big Tech’s artificial intelligence spending. The Dow Jones Industrial Average added roughly 0.7%.
Despite Friday’s turnaround, all three gauges posted losses for the week. The US economy added just 12,000 jobs in October, significantly missing expectations. The government attributed the disappointing numbers to recent hurricanes and strike activity, most prominently at Boeing.
The report is the last major economic data before the Federal Reserve’s next policy decision on Nov. 7. Market expectations for that meeting remained steady, with traders pricing in about 99% odds of a quarter-point rate cut.
Meanwhile, Amazon’s upbeat earnings helped dissipate the gloom surrounding Big Tech’s prospects that drove Thursday’s stock slump. Amazon shares jumped over 6% after CEO Andy Jassy reported seeing triple-digit revenue growth. Intel also boosted market morale with its strong performance.
However, Apple shares slipped following a mixed earnings report. Boeing shares edged higher after the company reached a deal to end a significant factory workers strike and lift wages by 38%. The hotly contested presidential election is just days away.
Election Day will highlight an economic calendar filled with major corporate earnings and a Federal Reserve policy meeting that is widely expected to result in another rate cut. On the earnings front, several entertainment heavyweights, including Sony, Warner Bros. Discovery, and Paramount, are on the docket.
amazon’s earnings boost market morale
Sharing economy companies Airbnb and Lyft are also scheduled to report, following Uber’s positive earnings release this week. Investors will closely watch the next Fed decision scheduled for Thursday.
Market predictions are nearly certain that the central bank will cut interest rates by 25 basis points, marking the second consecutive cut but a more modest one than the 50 basis point reduction in September. How the Fed will respond to a cooling labor market remains a key question for central bankers. The policy move will likely carry increased significance as it will come just two days after the election.
Trump Media & Technology Group’s stock fell over 10% on Friday, capping off a volatile week that included multiple trading halts and significant swings just days before the presidential election. Over the five days, the stock has fallen about 20%, although it still remains higher than its September lows. The oscillation of shares between highs and lows will continue as the election nears.
The final jobs report before the election showed a labor market disrupted by weather and worker strikes. While the White House and Kamala Harris’ allies focused on the report’s “noisy” nature, the Trump campaign seized on the low numbers, alleging manipulation without evidence. The jobs report has become a focal point in the final days of the 2024 election season.
Wall Street markets built on early momentum Friday afternoon as investors embraced strong earnings from Amazon, placing major indexes on track for daily gains. The Nasdaq Composite popped 1.1%, and the S&P 500 rose 0.9%. The Dow Jones Industrial Average added almost 1.1%, poised to notch a win for the week.
Quarterly reports from Amazon and Google parent Alphabet provided an AI-era playbook for investors waiting for results on massive infrastructure spending. Alphabet’s earnings beat analysts’ estimates, thanks to strong growth in its cloud business. Even as investors have expressed impatience with the tech industry’s enormous investments in AI technology, Google and Amazon showed that the profitability of their core businesses can alleviate those concerns.
However, Microsoft and Meta received a more unforgiving response, with investors sending both stocks lower despite strong earnings reports.
