Wall Street closes higher as jobs data hints at soft landing

NEW YORK – US stock indexes closed higher on Dec 8, with strong gains from Nvidia and Meta Platforms after a robust US jobs report fuelled investor optimism about a soft landing for the economy.

Investors pared bets that the Federal Reserve will cut interest rates in March after a Labour Department report showed nonfarm payrolls increased by 199,000 jobs in November, compared with an estimated increase of 180,000.

The unemployment rate slipped to 3.7 per cent, while average earnings edged up to 0.4 per cent on a monthly basis, compared with forecasts of 0.3 per cent growth.

Interest rate futures show traders widely expect the Federal Reserve to hold interest rates steady at its meeting next week, according to the CME FedWatch tool. However, futures prices now imply traders mostly expect the Fed to start cutting rates in May, two months later than the March meeting many investors had been betting on in recent days.

“The drop in the unemployment rate in particular will assuage any concerns of a recession, and with payrolls and earnings both rising, it keeps the ‘soft landing’ narrative very much in the ascendancy,” said Mr Stuart Cole, head macro economist at Equiti Capital in London.

“The report will likely see some of those forecasting an early Fed cut next year re-evaluating their positions,” Mr Cole said.

Chipmaker Nvidia and Facebook parent Meta Platforms helped lift the S&P 500 and Nasdaq.

Shares of Google-parent Alphabet gave up gains after an AI-led rally in the previous session.

Other data showed US consumer sentiment perked up much more than expected in December, snapping four straight months of declines.

Robust quarterly reports and optimism that the Fed has finished raising rates have fuelled steady gains in the US stock market since late October.

According to preliminary data, the S&P 500 gained 18.44 points, or 0.40 per cent, to end at 4,604.03 points, while the Nasdaq Composite gained 60.94 points, or 0.42 per cent, to 14,400.93.

The Dow Jones Industrial Average rose 119.42 points, or 0.33 per cent, to 36,236.80.

Honeywell dipped after the industrial firm said it would buy air conditioner maker Carrier Global’s security business for US$4.95 billion (S$6.6 billion). Carrier’s shares rose almost 4 per cent.

Paramount Global soared after reports of takeover interest in the media company. Peer Warner Bros Discovery jumped 6.6 per cent.

DocuSign rallied after the e-signature product provider raised its annual forecast for revenue. REUTERS

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