NEW YORK — On Friday, U.S. stock indexes are exhibiting relative stability following a job market report that produced mixed results, which analysts believe will have minimal impact on the financial markets.
In early trading, the S&P 500 saw a slight increase of 0.1%, with the index expected to end the week with modest gains. Meanwhile, the Dow Jones Industrial Average experienced a minor decline of 14 points, reflecting a drop of less than 0.1% as of 9:35 a.m. Eastern time. The Nasdaq composite, however, recorded a positive turn with a 0.3% increase.
The bond market showed stronger movements, as Treasury yields rose in response to the U.S. jobs report, which indicated that employers added far fewer jobs last month than anticipated by economists. Despite the hiring numbers being less than half of those seen in December, the report provided some positive news for workers, as it noted a decrease in the unemployment rate and an increase in average wages that outpaced expectations.
Taking all elements of the report into account, market analysts suggest that this data is unlikely to shift the Federal Reserve’s stance significantly regarding interest rates. They noted that unusual factors, such as California’s wildfires during that month, might have influenced the outcomes.
“The Fed is expected to approach today’s report with caution,” commented Lindsay Rosner, who leads multi-sector fixed income investments at Goldman Sachs Asset Management.
The Federal Reserve initiated cuts to its primary interest rate in September, aiming to alleviate economic and job market pressures. However, at the end of the previous year, it signaled that future cuts in 2025 may be fewer than initially predicted due to persistent inflation concerns. Lower interest rates are generally favorable on Wall Street, as they encourage investors to increase spending on stocks and other assets.
Market expectations had hoped for Friday’s report to strike a balance—neither weak enough to raise concerns about a faltering U.S. economy nor strong enough to suggest rising inflation pressures.
Scott Wren, a senior global market strategist at Wells Fargo Investment Institute, asserted that the jobs report did not alter his prediction that the Fed will reduce the federal funds rate only once in 2025. This outlook is more conservative compared to many traders, who estimate nearly a 50% likelihood that the Fed will lower rates at least twice, according to data from CME Group. Additionally, some investors are betting on the possibility of no rate cuts occurring at all.
Wren believes that financial markets may continue to experience volatility in the short term due to uncertainty surrounding interest rates, alongside apprehensions about President Donald Trump’s tariffs and assorted global uncertainties.
This week, apprehensions regarding a possible global trade war shook financial markets domestically and internationally. However, these concerns have subsided somewhat as Trump announced a 30-day delay on tariffs imposed on both Mexico and Canada. Bank of America economists noted in a BofA Global Research report that while the situation in this regard may appear to improve, uncertainty regarding Europe and its potential challenges could still affect global investment.
Meanwhile, shares of major U.S. corporations are fluctuating as they disclose profits for the last quarter of 2024. Amazon, a key player on Wall Street, surpassed earnings expectations but saw its stock decline by 2.2%. Investors concentrated more on its forthcoming revenue forecast, which fell short of analyst estimates.
In contrast, both Expedia Group and video-game manufacturer Take-Two Interactive Software registered better-than-anticipated earnings, helping to offset Amazon’s losses. Expedia shares surged by 13.8%, while Take-Two’s stock increased by 10.9%.
In the bond market, the yield on the 10-year Treasury increased to 4.47%, up from 4.44% seen late Thursday.
Internationally, stock indexes reflected a mixed performance across Europe and Asia.
