Dow Rallies 500 Points on Friday, Cutting Losses for the Week

Stocks rose Friday, but all the major averages headed for a week of losses, as investors digested the October jobs report and what it means for the pace of future Federal Reserve rate hikes.

The Dow Jones Industrial Average surged 540 points, or 1.7%. The S&P 500 and Nasdaq Composite advanced 1.8% and 1.7%, respectively.

A better-than-expected October nonfarm payrolls report on Friday further fueled some concerns that the Fed will persist with its tightening campaign. The report showed 261,000 payrolls added in October, surpassing a Dow Jones estimate of 205,000 additions. However, the unemployment rate came in at 3.7%, slightly above the expected 3.5%.

Some investors viewed Friday’s jobs print as a mixed picture, given the rise in both unemployment and jobs. But investors may be interpreting that positively because it signals a cooldown in the labor market without the economy collapsing said Keith Lerner, chief market strategist at Truist Advisory Services.

“If it was all broad-based strength, I think that would actually be more concerning for the market,” he said. “In an ironic way, a mixed report is probably a good report for the market because it shows the economy’s not falling off a cliff.”

Despite Friday’s gains, all the major averages are on track to close out the week with losses, with the Dow down 1.5% set to end four weeks of gains. The S&P and Nasdaq are down 3.5% and 5.8%, respectively, on pace to break two-week winning streaks. The tech-heavy Nasdaq is also on course for its worst weekly performance since January 2022.

Friday’s jobs report comes after another downbeat session for Wall Street.

The Dow on Thursday lost about 0.5%, while the S&P 500 fell 1%. The Nasdaq, meanwhile, shed 1.7% as investors weighed the latest 0.75 percentage point rate hike from the Fed, and commentary suggesting a pivot could be further away than traders anticipated.

Corporate earnings season continued, with mobile payment company Block surging 13% after beating expectations. Carvana shared dropped as it posted a wider-than-expected loss, while Twilio and Atlassian both plummeted on disappointing guidance.