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December 7, 2023
Posted by: legaleseblogger
Category: Related News

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Stocks Open Higher as Investors Watch Labor Market Data

US stocks saw gains on Thursday as investors turned their attention to labor market data for clues about the future of interest rates. The Dow Jones Industrial Average (^DJI) trailed slightly behind, rising around 0.2%, while the S&P 500 (^GSPC) surged 0.5% and the Nasdaq Composite (^IXIC) indicated a bounceback for tech stocks with a 0.8% increase.

Amidst recent signs of the labor market returning to normal, the Federal Reserve’s interest rate hikes to combat inflation have been showing their intended effects. With the possibility of a soft landing for the economy becoming more probable, traders are beginning to expect a shift in Fed policy towards rate cuts.

However, the market was jolted on Thursday after leaders at the Bank of Japan suggested that the central bank’s negative interest rate regime may be coming to an end. This news contributed to a spike in the 10-year Treasury yield (^TNX) by as much as 8 basis points to 4.18%. Furthermore, there is growing speculation that stocks are due for a slowdown following their strong rally in November, as December is typically a quieter month for the markets.

The most recent weekly jobless claims data revealed that 220,000 claims were filed in the week ending December 2, in line with economists’ expectations and only 2,000 more than the previous week, mainly due to limited increases in layoffs.

However, the decisive test for inflation and interest rate expectations will come with the release of the monthly US jobs report on Friday, just ahead of the Fed’s final meeting of the year next week.

Meanwhile, oil prices made a slight recovery after hitting a five-month low, with West Texas Intermediate futures (CL=F) and Brent (BZ=F) crude futures both seeing approximately 1% increases.