Dow Jones adds almost 500 points on rate cut hopes as shutdown cancels key inflation, jobs reports
4:06pm: Investors bet on December cut
US stocks finished a turbulent week on a high note after New York Fed president John Williams signalled a rate cut could be coming at the FOMC’s December meeting.
The Dow Jones led the gains, adding 493 points or 1.1% at 46,245 points. The S&P 500 was up 1% at 6,603 points and the Nasdaq added 0.9% at 22,273 points.
3:22pm: Stocks rally
Dovish Fed comments saw US stocks on track to finish Friday’s session higher, with the Nasdaq and the S&P 500 up 1.3% and the Dow Jones up 1.2%.
“This week’s sharp sell-off in US stocks and cryptocurrencies briefly stalled as Fed December rate cut expectations increased from 41% to 73% after New York Fed President John Williams suggested the Fed may cut rates again soon,” IG senior technical analyst Axel Rudolph said.
“The decline resumed on renewed tech selling, though, with the S&P 500 and Nasdaq 100 on track for their third straight losing week, hitting over two-month lows. Meanwhile Bitcoin slid to a seven-month low, and came close to the $80,000 mark, before halting ist descent.”
2:26pm: Market movers
Ross Stores Inc (NASDAQ:ROST) shares delivered a strong performance in the third quarter of fiscal 2025, sending its shares more than 8% higher on Friday.
BJ’s Wholesale Club (NYSE:BJ) shares were up on Friday, as investors looked past a modest sales miss and focused instead on yet another earnings beat and a second straight upgrade to full-year profit guidance.
Gap Inc (NYSE:GPS) shares were 9.5% higher on Friday after investors had a night to digest a surprisingly punchy third-quarter update.
1:12pm: Shutdown cancels inflation, jobs reports
The longest government shutdown in US history has forced the federal government to cancel the October 2025 inflation and jobs reports, the Bureau of Labor Statistics (BLS) announced on Friday.
Limited October price data will instead be combined with November figures in a delayed release scheduled for December 18.
The 43-day shutdown disrupted in-person data collection critical to calculating economic indicators like the Consumer Price Index (CPI). In-person surveys account for roughly two-thirds of the inputs for inflation measures, and BLS said it cannot retroactively collect the missing data.
Some non-survey-based data for October may still be included in the November release, though month-to-month percent changes will be incomplete where October figures are missing.
The disruption also affects employment reporting. The October Employment Situation report has been canceled, marking the first time in US history that a government shutdown led to the cancellation of an unemployment report.
Establishment survey data for October will be published with November numbers, while household survey data could not be collected and will not be retroactively obtained.
The delay means the Federal Reserve will lack key inflation and jobs figures ahead of its December meeting, when it will consider potential interest rate changes.
12:02pm: Consumer sentiment near all-time low
US consumer sentiment edged lower in November, reflecting growing anxiety over inflation, incomes, and job security.
The University of Michigan’s final reading of its consumer survey showed sentiment at 51, down from October’s 53.6 and nearly 30% lower than a year ago. This marks the second-lowest level on record for the monthly survey.
The November reading followed a brief boost after the federal government shutdown ended on November 12, which had initially pushed sentiment to a preliminary low of 50.3.
Despite the end of the shutdown, Americans remain concerned about the temporary nature of the government funding deal, which only extends through January, and its potential economic consequences.
Job security concerns are particularly acute. Roughly 69% of consumers expect unemployment to rise over the next year, more than double the rate seen in November 2024.
The perceived probability of losing one’s job is now at its highest level since 2020, with young adults aged 18 to 34 showing the most pessimism. Expectations for job loss over the next five years are at the highest level since 2012.
The survey also highlighted widespread financial unease. Americans reported worsening personal finances, heightened concerns about business conditions, and lingering inflation pressures.
Short-term inflation expectations ticked up slightly, while longer-term expectations eased.
The only notable exception to the broadly negative sentiment was consumers with significant stock holdings, who reported relatively higher confidence, buoyed by gains in the technology sector.
10:46am: December cut ‘far from a forgone conclusion’
As the Federal Reserve approaches its December rate-setting meeting, analysts at Deutsche Bank see a patchwork of signals making the decision far from straightforward.
The September jobs report, in particular, provides “a perfect Rorschach test for Fed officials,” the analysts wrote in a note to clients.
For officials leaning hawkish, the analysts detailed a case for holding rates steady. They point to the uptick in headline plus 119,000 and private plus 97,000 payrolls, a broadening of employment gains shown in diffusion indexes, upward revisions to average hourly earnings, a higher participation rate, and stable income trends.
“Continued low readings on initial jobless claims support the conclusion that, at worst, the labor market is slowly cooling,” the analysts wrote.
Those more inclined toward caution, however, highlight signs of labor market softness. The unemployment rate rose to 4.44%, just shy of the 4.5% projection for Q4 in the September report, while downward revisions to previous months’ employment data, including payroll declines in June and August, signal potential weakening. Rising WARN notices may also indicate that the historically low firing dynamic could be shifting.
Given these mixed signals, Deutsche Bank notes that the Fed is unlikely to converge on a single path. “For a Committee that may have been biased towards not cutting in December, the path of least resistance could be to skip the next meeting,” the analysts wrote, citing Chair Powell’s October remarks that a December rate reduction was “far from a foregone conclusion.”
9:55am: Investors eye December rate cut
US stocks rose at the open on Friday after a turbulent week on increased rate cut bets, with the S&P 500 up 0.4% while the Dow Jones and the Nasdaq both added 0.3%.
The rally follows remarks from John Williams, president of the New York Federal Reserve, suggesting a potential interest rate cut in the near term.
As a result, market expectations for a December rate reduction surged to a 75% likelihood, a significant rise from around 40% the day before.
Major movers early in the session included Ross Stores and Gap, which both made gains on the back of upbeat quarterly earnings reports.
8:36am: Stocks bounce back
US stocks moved higher before Friday’s opening bell, bolstered by fresh signals that the Federal Reserve may still cut rates in December.
Nasdaq futures rose about 0.4%, S&P 500 futures gained 0.5%, and Dow Jones added 0.5%, pointing to a positive start after a challenging week for Wall Street.
The shift came after New York Fed President John Williams suggested the central bank could reduce rates again next month.
In prepared remarks for a speech in Santiago, Chile, Williams said: “I view monetary policy as being modestly restrictive, although somewhat less so than before our recent actions. Therefore, I still see room for a further adjustment in the near term to the target range for the federal funds rate to move the stance of policy closer to the range of neutral, thereby maintaining the balance between the achievement of our two goals.”
AI stocks, which had been bracing for another rough session, trimmed or erased premarket losses following the remarks with Nvidia and AMD both turning positive.
However, the S&P 500 is down 2.9% on the week, the Dow nearly 3%, and the Nasdaq 3.6%.
Meanwhile, Bitcoin extended its steep sell-off, underscoring lingering risk-off sentiment driven by concerns over the AI trade and geopolitics. Bitcoin dropped another 8.8% to around $83,660, hitting a multi-month low.
Ipek Ozkardeskaya, Swissquote senior analyst, said the week is closing with more uncertainty than it began, pointing to Nvidia’s failed attempt to shore up the market, expectations that the Fed still won’t cut in December, and rising Japanese bond yields that could spur repatriation flows from the roughly $3.4 trillion of overseas assets held by Japanese investors.
She noted that the “bubble talk is bubbling everywhere” as stretched valuations coincide with rising macro risks. While today’s prices aren’t yet near the extremes of the dot-com boom, the late-1970s gold frenzy, or Japan’s 1980s bubble, she warned that history suggests “bubbles tend to inflate well beyond what reason would suggest.”
“Remember: a financial bubble is not a bubble until it bursts,” Ozkardeskaya concluded.
