The S&P 500 and Nasdaq hit record closing highs on Friday. Lululemon’s optimistic forecast and U.S. job data drove expectations of a Federal Reserve rate cut.
The Dow ended lower due to a sharp 5.1% decline in UnitedHealth Group shares. The consumer discretionary sector led the market with a 2.4% gain, setting an all-time high. Lululemon shares surged 15.9% after the company raised its full-year forecast.
Job Data Signals Fed May Cut Interest Rates
The U.S. Labor Department reported strong job growth in November. However, the unemployment rate rose to 4.2%, indicating a softer labor market.
Bill Northey from U.S. Bank Wealth Management said, “It supports the case for the Fed to continue to cut rates in December and into the first quarter.”
Dow Jones fell 123.19 points to 44,642.52, down 0.28%. The S&P 500 rose 15.16 points to 6,090.27, while the Nasdaq Composite climbed 159.05 points to 19,859.77.
The Nasdaq marked its 36th record close this year. Meanwhile, the S&P 500 hit its 57th record closing high for 2024.
For the week, the Nasdaq gained 3.3%, the S&P 500 rose 1%, and the Dow fell 0.6%.
U.S. rate futures now show a 90% chance the Fed will cut rates by 25 basis points at its December meeting. This is up from the previous 72%.
Fed Governor Michelle Bowman cautioned that inflation risks remain, signaling careful rate decisions ahead.
Meta and Market Sentiment Updates
Shares of Meta Platforms rose 2.4% after a U.S. appeals court upheld a law. The law requires ByteDance to divest TikTok by early next year or risk a ban.
Health insurance companies, including UnitedHealth, faced continued losses following a tragic event. Two days ago, Brian Thompson, UnitedHealth’s CEO, was fatally shot outside a Manhattan hotel. The shooter remains at large, and the motive is unknown.
The Cboe Volatility Index, Wall Street’s fear gauge, dropped 0.77 points to 12.77. This was its lowest finish since mid-July.
Advancers outnumbered decliners slightly on the Nasdaq, with 2,610 stocks rising and 1,678 falling.
Volume across U.S. exchanges totaled 12.99 billion shares, compared to the 14.5 billion average for the last 20 trading days.