In the latest developments on Wall Street, US benchmark equity indexes experienced an upward trend during intraday trading, even as Treasury yields saw a notable surge following the release of official job growth data. The Nasdaq Composite rose by 0.9% to reach 18,079, reflecting a strong market sentiment.
The S&P 500 also showed gains, increasing by 0.6% to settle at 5,733.3, while the Dow Jones Industrial Average climbed 0.5% to 42,218.5. Among various sectors, consumer discretionary and energy proved to be the frontrunners in the gainers' column, whereas real estate faced the largest declines. The Bureau of Labor Statistics published an impressive report indicating that nonfarm payrolls in the US had increased by 254,000 in September, far exceeding the consensus expectation of 150,000 jobs added, based on a survey from Bloomberg.
The unemployment rate also showed a positive adjustment, declining from August's 4.2% to 4.1% for September, aligning with market forecasts. In a significant monetary policy move, last month the Federal Reserve cut its benchmark lending rate by 50 basis points, bringing it down to a range of 4.75% to 5%.
However, given the latest job report, experts from Oxford Economics have suggested that another reduction of 50 basis points appears unlikely. They predict that the Federal Reserve will likely implement 25-basis-point cuts during their meetings in November and December. The likelihood that the Federal Open Market Committee will decrease interest rates by 25 basis points in the upcoming month surged to an impressive 97% as of Friday, a substantial increase from 68% the previous day.
Conversely, the chances of a 50-basis-point cut plummeted to zero from 32%, as revealed by analytics from the CME FedWatch tool. Turning to the bond market, the US two-year yield escalated significantly, rising by 19.5 basis points to reach 3.91% intraday, while the 10-year Treasury rate also saw a notable increase of 11.7 basis points, reaching 3.97%. In labor news, the International Longshoremen's Association has concluded its strike on the East and Gulf Coast ports, following a tentative wage agreement with the United States Maritime Alliance.
This agreement has resulted in the extension of their contract until January 15. In the energy sector, West Texas Intermediate crude oil rose by 2.2%, reaching $75.33 a barrel during intraday trading. The firm D.A. Davidson noted that "oil prices rose and were on track for significant weekly gains as investors weighed the potential for a wider Middle East conflict to disrupt crude flows against a well-supplied global market." In company-related news, Rivian Automotive ($RIVN) reported a decline in third-quarter vehicle production and deliveries, falling short of analyst expectations due to ongoing supply chain issues.
Consequently, the electric vehicle manufacturer revised its full-year output guidance downward, seeing its shares decrease by 4.7% intraday. Conversely, Norwegian Cruise Line ($NCLH) saw a share increase of 3.2% after Stifel adjusted its price target on the stock to $29 from $27 while maintaining a buy rating.
Meanwhile, homebuilders D.R. Horton ($DHI) and Lennar ($LEN) were among the notable decliners in the S&P 500, with decreases of 3.5% and 3.3%, respectively. In precious metals, gold prices fell by 0.4%, settling at $2,667.60 per troy ounce, while silver prices dipped by 0.1%, reaching $32.42 per ounce..