[New York Stock Market] Mixed Employment Signals Amid Expectations of China Lockdown Easing... Nasdaq Up 1.28%

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] Major indices on the U.S. New York Stock Exchange closed higher on the 4th (local time) amid mixed signals from the employment report, as investors awaited next week's midterm elections and Consumer Price Index (CPI) announcement. News that China may ease its COVID-19 lockdown policies and resume economic activities also added upward pressure. The dollar showed weakness.

On this day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 32,403.22, up 401.97 points (1.26%) from the previous session. The large-cap focused S&P 500 index rose 50.66 points (1.36%) to 3,770.55, and the tech-heavy Nasdaq index ended the day at 14,752.5, up 132.31 points (1.28%). The New York stock market, which had been declining all week due to concerns over aggressive tightening and economic slowdown, rebounded. However, on a weekly basis, all three major indices closed lower.

By sector, the rally in Chinese stocks and China-related shares listed in the U.S. was notable. Pinduoduo closed up 8.64% from the previous session. JD.com rose 9.74%, and Alibaba Group Holdings jumped 7.08%. Electric vehicle maker Nio surged more than 17%.

Financial stocks such as JPMorgan Chase (+2.74%), Bank of America (+2.51%), and Wells Fargo (+2.64%) also showed gains. Semiconductor stocks including Nvidia (+5.48%), AMD (+3.46%), and Intel (+4.35%) rose in tandem. Among large-cap Big Tech, Google Alphabet (+3.78%) and Microsoft (+3.33%) led the rally, while Tesla (-3.64%) and Apple (-0.19%) closed lower.

Additionally, Starbucks rose more than 8% after releasing earnings that exceeded expectations following the previous day's market close. Collaboration software company Atlassian plunged nearly 29% due to earnings and future guidance falling short of market expectations. Sports betting company DraftKings dropped 27.82% after warning that a recession could impact customer spending despite solid earnings.

Investors focused on the October employment report, news from China, and movements in government bond yields on this day.

According to the Department of Labor, nonfarm payrolls increased by 261,000 in October, far exceeding the market forecast of around 200,000. The October wage growth rate rose 0.37% month-over-month and 4.73% year-over-year, confirming that the labor market remains robust and inflationary pressures persist. However, the unemployment rate rose to 3.7% from 3.5% the previous month. Some interpret this as a sign that the Fed's aggressive tightening is gradually cooling the labor market.

With the employment report sending mixed signals, investors have also expressed somewhat divergent views on the Federal Reserve's (Fed) future moves. Michael Schumacher of Wells Fargo said, "There is no clear sign that the labor market is cooling," adding, "This means the Fed will not be pleased," emphasizing aggressive tightening.

Charlie Ripley, Senior Investment Strategist at Allianz Investment, commented, "Today's employment report may indicate that the Fed's preemptive rate hikes are starting to take effect," adding, "Wage growth was the lowest since the beginning of the year, and the tightening effects are gradually permeating the economy. Although employment data has not sharply slowed, it is moving at a very slow pace." Earlier, Amazon froze hiring at its headquarters, and ride-sharing companies Lyft and Stripe announced plans to reduce their workforce by 13-14%. Twitter has also begun layoffs following its acquisition by Tesla CEO Elon Musk.

Investor attention is now focused on next week's Consumer Price Index (CPI), which is expected to provide clues about the Fed's rate hike magnitude in December. The U.S. midterm elections, which will reshape congressional power, are also scheduled for next week. Bloomberg reported, "Investors are evaluating mixed job data and waiting for next week's inflation figures to find more hints on when the Fed might slow the pace of rate hikes."

News that China may ease its COVID-19 lockdown policies lifted stock markets and commodity prices. Zheng Guang, Chief Scientist at the Chinese Center for Disease Control and Prevention, stated at a Citigroup-hosted conference that the current situation is changing and China's COVID-19 policies will undergo significant changes. Local Chinese media reported that a related press conference is expected this weekend. Major foreign media also reported that China will soon ease quarantine rules for incoming travelers.

Peter Bukva, Chief Investment Officer at Blickley Global Advisors, said, "If the news from China is true, it is good news for the global economy." However, he added, "It is negative for inflation because it will lead to another rise in commodity prices."

The Chicago Board Options Exchange (CBOE) Volatility Index (VIX), known as Wall Street's "fear gauge," fell below the 25 level for the first time since mid-September.

In the New York bond market on this day, the yield on the U.S. 10-year Treasury note rose to around 4.17%, briefly surpassing 4.2% during the session. Meanwhile, the 2-year Treasury yield, sensitive to monetary policy, jumped to about 4.88% before falling to 4.667%, showing a decline compared to the previous session.

The dollar also showed weakness. The Dollar Index, which measures the dollar's value against six major currencies, dropped nearly 2% to around the 110 level.

Oil prices surpassed $90 per barrel on expectations of eased COVID-19 restrictions in China. On the New York Mercantile Exchange, December West Texas Intermediate (WTI) crude oil closed at $92.61 per barrel, up $4.44 (5.04%) from the previous session.

This content was produced with the assistance of AI translation services.