Investing.com – Market Recap

The S&P 500 closed higher on Friday as disappointing job gains in the October payrolls report solidified expectations of a Fed rate cut next week. A rally in Amazon also boosted consumer stocks.

At 4 p.m. ET (20:00 GMT), the Dow Jones Industrial Average was up 228 points, or 0.7%. The S&P 500 index rose by 0.4%, and the NASDAQ Composite gained 0.8%.

Weak Payrolls Report Supports Fed Rate Cut Bets

Economic data released earlier on Friday revealed that the US economy added only 12,000 nonfarm payrolls in October, significantly lower than the expected 106,000 and down from the revised 223,000 in September. This dip was influenced by the devastating recent hurricanes and ongoing labor actions.

The Federal Reserve meets next week, and this report is unlikely to alter the prevailing sentiment that policymakers will agree to a rate cut, likely by 25 basis points. Macquarie noted, "While greater clarity should emerge on the labor market's trajectory with the release of November data, today's result should keep the Fed on course for further near-term rate cuts." The expectation remains for reductions of 25 bps in both November and December.

Apple, Amazon in Spotlight

Tech giants Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) announced quarterly results after the trading day ended on Thursday. Apple’s stock fell more than 1% after revealing a current-quarter revenue outlook in the low- to mid-single-digits, which missed the top-end of Wall Street estimates. This signals caution ahead of the critical holiday trading season.

In contrast, Amazon’s stock surged over 6% after posting an 11% increase in overall quarterly revenues compared to last year, surpassing Wall Street expectations due to exceptional opportunities presented by generative AI.

Energy Stumbles as Oil Majors Roll Out Earnings

The energy sector remained near the flatline as oil majors, including Exxon Mobil Corp (NYSE:XOM) and Chevron Corp (NYSE:CVX), reported better-than-expected quarterly earnings. While Exxon Mobil's revenue fell short of estimates, pushing its stock down over 1%, rising oil prices kept losses in the broader energy sector in check amid increasing geopolitical tensions in the Middle East, especially after reports of Iran preparing a retaliatory strike on Israel.