[New York Stock Market] Rises While Awaiting Employment Report... Nasdaq Up 1.37%

Major indices on the U.S. New York Stock Exchange closed higher on the 7th (local time) ahead of the employment report release the next day.

At the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 36,117.38, up 62.95 points (0.17%) from the previous session. The S&P 500, focused on large-cap stocks, rose 36.25 points (0.8%) to 4,585.59, while the tech-heavy Nasdaq index closed at 14,339.99, up 193.28 points (1.37%).

Among the S&P 500 sectors, all eight sectors except energy, healthcare, and utilities rose. JetBlue surged more than 15% following better-than-expected earnings and an upward revision of its annual guidance. Alphabet, Google's parent company, jumped over 5% on excitement surrounding its AI language model 'Gemini.' AMD nearly rose 10% after unveiling a new AI semiconductor chip challenging Nvidia. Nvidia, a leading AI stock, also gained more than 2%. GameStop climbed over 10% after news that Chairman Ryan Cohen was granted stock purchase authority. However, Chuy closed slightly lower due to disappointment over its Q4 sales outlook.

[Image source=Reuters Yonhap News]

Investors awaited the Labor Department's November nonfarm payroll report to be released the following day, trying to gauge the future direction of the Federal Reserve's monetary policy through key indicators. The ADP employment report and job postings released this week confirmed signs of cooling in the labor market due to cumulative tightening effects.

However, the unemployment claims data released that day fell short of expectations. The U.S. Labor Department reported that initial jobless claims for the week of November 26 to December 2 rose by 1,000 to 220,000, slightly below the Wall Street Journal (WSJ) consensus estimate of 222,000. Additionally, according to the layoff report by Challenger, Gray & Christmas (CG&C), planned layoffs in November totaled 45,510, a 24% increase from the previous month but a 41% decrease compared to the same period last year.

As a result, investors appeared to focus more on the signals the upcoming employment report would provide. Wall Street estimates that November nonfarm payrolls increased by 190,000. Economic media outlet CNBC reported, "Investors are in a confused state ahead of the main event, the employment report release," adding, "Investors hope the labor market is cooling and that the Fed will pause rate hikes." Alex McGrath, Chief Investment Officer (CIO) at NorthEnd Private Wealth, said, "The market is much more likely to expect rate cuts early next year."

Currently, the market has largely priced in a rate hold at the Federal Open Market Committee (FOMC) meeting scheduled for December next week. According to the CME FedWatch tool, federal funds futures on that day reflected over a 97% probability that the Fed will hold rates steady this month. The probability of maintaining the hold through January next year exceeds 83%. The chance of a rate cut starting in January next year is priced at 14%. Expectations for a rate cut of 0.25 percentage points or more in March or May next year exceed 60% and 85%, respectively.

On the other hand, some on Wall Street remain cautious, warning that market expectations for rate cuts may be excessive. In a foreign media survey released the previous day, half of economic experts responded that the Fed would hold rates steady at least until July next year and that any rate cuts would be aimed at adjusting real interest rates.

In the New York bond market, the 10-year U.S. Treasury yield moved slightly higher at around 4.14%. The 2-year yield, sensitive to monetary policy, edged down to about 4.58%. The dollar index, which measures the value of the U.S. dollar against six major currencies, fell more than 0.5% to around 103.6. The Chicago Board Options Exchange (CBOE) Volatility Index (VIX), known as Wall Street's fear gauge, rose more than 0.5% to around 13.

International crude oil prices continued to decline. On the New York Mercantile Exchange, January delivery West Texas Intermediate (WTI) crude closed at $69.34 per barrel, down 4 cents (0.06%) from the previous session.