The Dow Jones Industrial Average shot higher Friday morning, following a day of steep declines that were largely driven by strong tech earnings that nevertheless spooked investors worried about companies’ huge AI spending.
Meanwhile, the U.S. economy added significantly fewer jobs than expected in October, according to data released Friday morning, as hurricanes and the Boeing strike took a toll on payrolls. All of it has the Federal Reserve on track to cut interest rates when the Federal Open Market Committee (FOMC) meets next week.
The Bureau of Labor Statistics released its final pre-election jobs report Friday morning, showing the addition of just 12,000 jobs in October. The unemployment rate held steady at 4.1%, matching expectations. The Boeing strike likely subtracted 44,000 jobs from the manufacturing sector, which lost 46,000 positions overall. Additionally, the report acknowledged the effects of Hurricanes Helene and Milton.
In the afternoon, the Dow was up 323 points, or 0.7%, while the S&P 500 rose 0.5% and the tech-heavy Nasdaq added 0.8%. The 10-year Treasury yield fell 3 basis points to 4.253% following October jobs data.
With the Federal Reserve’s next interest rate decision coming next week, Bankrate senior economic analyst Mark Hamrick said the central bank likely won’t hinge its next move too heavily on the recent information.
“The Federal Reserve is mindful that incoming data, including the monthly jobs report, risks being whipped around by temporary factors,” Hamrick said. “It is generally a good practice not to make too much of out of one month’s data.”
For now, he believes the most likely path for the FOMC will be to make a quarter-point cut at the Nov. 7 meeting and again at its Dec. 18 meeting. “The Fed is walking a tightrope between the goals of its dual mandate, maximum employment and stable prices,” he said.
Most major tech companies that reported earnings this week, including Google parent Alphabet (GOOGL+0.11%), Microsoft (MSFT+0.98%), and Facebook parent Meta (META-0.08%), posted profit gains. But their aggressive investments in AI nevertheless led to a tech stock selloff.
Warren Buffett’s Berkshire Hathaway (BRK) is set to release earnings Friday. Exxon Mobil (XOM-1.57%) and Chevron Corporation (CVX) also reported earnings before the market opened.
— Rocio Fabbro contributed to this article.