NVDA

US STOCKS-Wall Street closes higher as jobs data hints at soft landing

Credit: REUTERS/ANDREW KELLY

By Noel Randewich and Amruta Khandekar

Dec 8 (Reuters) - U.S. stock indexes closed higher on Friday, with strong gains from Nvidia and Meta Platforms after a robust U.S. jobs report fueled investor optimism about a soft landing for the economy.

Investors pared bets that the Federal Reserve will cut interest rates in March after a Labor Department report showed nonfarm payrolls increased by 199,000 jobs in November, compared with an estimated increase of 180,000.

The unemployment rate slipped to 3.7%, while average earnings edged up to 0.4% on a monthly basis, compared with forecasts of 0.3% growth.

Interest rate futures show traders widely expect the Federal Reserve to hold interest rates steady at its meeting next week, according to the CME FedWatch tool. However, futures prices now imply traders mostly expect the Fed to start cutting rates in May, two months later than the March meeting many investors had been betting on in recent days.

"The drop in the unemployment rate in particular will assuage any concerns of a recession, and with payrolls and earnings both rising, it keeps the ‘soft landing’ narrative very much in the ascendancy," said Stuart Cole, head macro economist at Equiti Capital in London.

"The report will likely see some of those forecasting an early Fed cut next year re-evaluating their positions," Cole said.

Chipmaker Nvidia NVDA.O and Facebook parent Meta Platforms META.Ohelped lift the S&P 500 and Nasdaq.

Shares of Google-parent Alphabet GOOGL.Ogave up gains after an AI-led rally in the previous session.

Other data showed U.S. consumer sentiment perked up much more than expected in December, snapping four straight months of declines.

Robust quarterly reports and optimism that the Fed has finished raising rates have fueled steady gains in the U.S. stock market since late October.

According to preliminary data, the S&P 500 .SPX gained 18.44 points, or 0.40%, to end at 4,604.03 points, while the Nasdaq Composite .IXIC gained 60.94 points, or 0.42%, to 14,400.93. The Dow Jones Industrial Average .DJI rose 119.42 points, or 0.33%, to 36,236.80.

HoneywellHON.Odipped after the industrial firm said it would buy air conditioner maker Carrier Global's CARR.N security business for $4.95 billion. Carrier's shares rose almost 4%.

Paramount GlobalPARA.Osoared after reports of takeover interest in the media company. Peer Warner Bros Discovery WBD.O jumped 6.6%.

DocuSign > rallied after the e-signature product provider raised its annual forecast for revenue.

Payroll growth ebbs back toward pre-Covid trend https://tmsnrt.rs/3deZoGA

S&P 500 components so far in 2023 https://tmsnrt.rs/3GEXCJC

(Reporting by Amruta Khandekar and Shristi Achar A in Bangalore, and by Noel Randewich in Oakland, Calif.; Editing by Anil D'Silva and David Gregorio)

((noel.randewich@tr.com))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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