On Friday, October 4th local time, the three major US stock indexes collectively closed higher. As of the close, the Dow Jones Industrial Average rose 0.81%, the Nasdaq rose 1.22%, and the S&P 500 index rose 0.90%.
The Nasdaq China Golden Dragon Index rebounded after a correction, closing up 3.05% and returning above 8000 points, with a cumulative increase of 11.85% for the week.
In terms of economic data, the non farm payroll in the United States increased by 254000 in September, the largest increase since March 2024; Expected to increase by 140000, the previous value has been revised from 142000 to 159000.
The unemployment rate in the United States in September was 4.1%, the lowest since June 2024, and is estimated to be 4.2%, compared to the previous value of 4.2%.
Non farm payroll exceeds expectations, Federal Reserve cuts interest rate by 50 basis points, expected to cool down
On Friday, October 4th local time, the three major US stock indexes collectively closed higher. As of the close, the Dow Jones Industrial Average rose 341.16 points, or 0.81%, to 42352.75 points; The Nasdaq rose 219.37 points, or 1.22%, to 18137.85 points; The S&P 500 index rose 51.13 points, or 0.90%, to 5751.07 points.
In terms of individual stocks and sectors. The Nasdaq 100 index rose 1.22%, marking the largest daily increase in two weeks. The Nasdaq China Golden Dragon Index rebounded after a correction, closing up 3.05% and returning above 8000 points, with a cumulative increase of 11.85% for the week. The Philadelphia Semiconductor Index (SOX) rose 1.59%, with all constituent stocks except Qualcomm closing higher. ARCADIUM, which focuses on exploration and development of lithium mines, surged 10% and rose more than 30% after the US stock market closed. It is reported that Rio Tinto is in talks to acquire the company.
In terms of economic data, the non farm payroll in the United States increased by 254000 people in September, the largest increase since March 2024, with an estimated increase of 150000 people, compared to a previous increase of 142000 people. The US Bureau of Labor Statistics revised the number of non farm payroll jobs added in July from 89000 to 144000; The number of new non farm employment in August was revised from 142000 to 159000. After the revision, the total number of new jobs added in July and August was 72000 higher than before the revision.
In addition, the unemployment rate in the United States in September was 4.1%, a new low since June 2024, estimated at 4.2%, compared to the previous value of 4.2%.
After the release of US employment data, traders lowered their bets on a 50 basis point rate cut by the Federal Reserve in November. Traders' expectations for the Fed's next four meetings to cut interest rates are less than 100 basis points. According to the Chicago Mercantile Exchange's FedWatch tool, the market's probability of the Fed cutting interest rates by 25 basis points in November has increased from 67.9% the previous day to 98.9%, while the probability of a 50 basis point rate cut has decreased to 0.
(Source: Chicago Mercantile Exchange FedWatch tool)
Jim Baird, Chief Investment Officer of Plante Moran Financial Advisors, said, "Although this report will not change the economic outlook, it should alleviate any concerns investors or the Federal Reserve may have about the job market." Earlier this week, Federal Reserve Chairman Jerome Powell said he did not want to see the labor market weaken further.
Currently, JPMorgan Chase and Bank of America also expect to cut interest rates by 25 basis points when the Federal Reserve meets again in November. They had previously called for more rate cuts, but labor market data shows that the US economy is resilient, so they have abandoned their previous calls. Michael Feroli, Chief US Economist at JPMorgan Chase, and Aditya Buhav, Economist at Bank of America, both pointed out that Friday's employment report was the reason for them to adjust their expectations for the Federal Reserve's loose policy path. Considering the 50 basis point interest rate cut by the Federal Reserve in September, they believe that a stable job market is a reason for the Fed to adopt a more cautious attitude.
In other markets, COMEX gold futures closed down 0.10% at $2673.2 per ounce, a cumulative decrease of 0.28% for the week; COMEX silver futures closed up 0.46% at $32.445 per ounce, with a cumulative increase of 1.66% for the week.
International oil prices have risen, with the November contract for US oil rising 1.00% to $74.45 per barrel; The December Brent crude oil contract rose 0.64% to $78.12 per barrel.
The US dollar index, which measures the US dollar against six major currencies, rose 0.52% on the day and closed at 102.520 at the end of the foreign exchange market. 1 euro to 1.0973 US dollars, lower than the previous trading day's 1.1026 US dollars; 1 pound is exchanged for 1.3122 US dollars, higher than the previous trading day's 1.3114 US dollars.
Chinese concept stocks rose nearly 12% in the week
In terms of sectors, the 11 major sectors of the S&P 500 index rose 9 times and fell 2 times. Among them, the financial and non essential consumption sectors led the gains, with gains of 1.56% and 1.47% respectively. The real estate sector led the decline, with a decrease of 0.53%.
Most popular technology stocks have risen. AMD Semiconductor rose nearly 5%, Tesla rose nearly 4%, Broadcom, Amazon, Oracle, Meta rose over 2%, Netflix, Nvidia, Arm, Intel rose over 1%, TSMC, Google A, Cisco, Texas Instruments, Apple, Micron Technology, Eli Lilly, and ASML rose slightly, while Qualcomm, Microsoft, and AMD computers fell slightly.
Cisco rose 0.61%. According to Bloomberg's report on Friday, Cisco is set to invest in cloud computing provider CoreWeave, with the deal valuing CoreWeave at $23 billion. CoreWeave is a popular startup focused on artificial intelligence, led by CEO Michael Entratuo. Previously, there were reports that CoreWeave is conducting a secondary transaction that allows existing shareholders to sell $400 million to $500 million worth of shares. The company is headquartered in Rozeland, New Jersey and is considering an initial public offering (IPO) as early as next year.
CoreWeave was an early adopter of Nvidia graphics chips, utilizing these chips to provide AI computing services for data centers. Its investors include Nvidia, Magnetar Capital, CoatueManagement, Jane Street, and Fidelity Investments. Cisco hopes to secure a place for its technology in rapidly expanding data center construction through this investment, meeting the growing demand for data transmission.
Tesla rose 3.91%. According to Reuters, Elon Musk's social media platform X has submitted a new application to restore services in Brazil. Previously, X was suspended from operations in Brazil since the end of August due to failure to comply with court orders related to hate speech management and failure to appoint legal representatives as required. In recent weeks, X has decided to comply with court orders, block some accounts under investigation, and requested service restoration on September 26th. The Brazilian Supreme Court judge once demanded that X pay a fine of over 5 million US dollars, and currently X has paid about 28.6 million Brazilian reals (approximately 5.24 million US dollars).
Meta rose 2.26%. Meta announced on Friday the launch of a new AI model, MovieGen, which can generate realistic videos with sound based on user prompts. MovieGen can generate background music and sound effects, and even edit existing videos. For example, tools can add props or change the environment in videos. The video of this model can be up to 16 seconds long, and the audio can be up to 45 seconds long. Meta stated that MovieGen performed better than other startups such as OpenAI and ElevenLabs' products in blind testing.
Although Meta has opened up its Llama language model for developers to use, MovieGen may not do so, and Meta stated that risks will be evaluated separately based on different models. Meta is collaborating with the entertainment industry and plans to integrate MovieGen into its own products next year. Meta has built MovieGen using licensed datasets and publicly available data, and this announcement comes at a time when Hollywood is exploring the application of generative AI technology.
Financial stocks have generally risen. First Capital Financial and American International Group rose by over 5%, while Mizuho Financial, Wells Fargo, JPMorgan Chase, Morgan Stanley, Deutsche Bank, and American Express rose by over 3%. Bank of America and Citigroup rose by over 2%, while Goldman Sachs, Regional Financial, United Bank of America, and Travelers Insurance rose by over 1%. UBS Group, Mastercard, and Visa rose slightly, while BlackRock fell slightly.
Most energy stocks have risen. ConocoPhillips, ExxonMobil, Western Petroleum, Marathon Oil, Apache Oil, Imperial Oil, BP, Schlumberger, and Murphy Oil rose more than 1%, while Petrobras and Shell rose slightly, Chevron fell slightly, Duke Energy fell more than 1%, and US Energy fell more than 10%.
ExxonMobil rose 1.84%. ExxonMobil stated in its latest regulatory filing that it expects its upstream business revenue to decrease by $600 million to $1 billion in the third quarter due to the drop in oil prices. In the third quarter, oil prices fell by 17%, marking the largest quarterly decline in a year. Brent crude oil closed at $71.77 per barrel on the last trading day of the quarter. The company also pointed out that the decline in refining profit margins may result in a reduction of up to $1 billion in profits. According to analysts' estimates, ExxonMobil's adjusted profit for the third quarter is expected to be $1.97 per share, compared to a net profit of $9.1 billion or $2.25 per share for the same period last year.
Popular Chinese concept stocks have generally risen, with the Nasdaq China Golden Dragon Index rising 3.05%, returning above 8000 points and accumulating 11.85% gains this week. Huya rose over 10%, Weibo rose nearly 10%, Miniso rose over 8%, Manbang and JD.com rose over 5%, Futu Holdings and iQiyi rose over 4%, Xiaopeng Motors and Douyu rose over 3%, New Oriental and Bilibili rose nearly 2%, Vipshop, Ideal Auto, Alibaba, Baidu, Pinduoduo, and NIO rose over 1%, NetEase rose slightly, and Tencent Music fell slightly.
