Stocks were relatively flat on Thursday as investors braced for the Federal Reserve’s interest rate decision next week.
The S&P 500 traded around flat, as did the Nasdaq Composite. The Dow Jones Industrial Average was also flat.
Treasury yields rose, while bitcoin continued to sell off, down 1%. The cryptocurrency fell below $85,000 on Monday, hitting its lowest level since March. But the token recovered on Tuesday morning and continued to trade above $90,000 for the week, offering a glimmer of hope to disenfranchised crypto investors.
Investors focused on a report from recruiting firm Challenger, Gray & Christmas, which showed that announced job cuts in November by U.S. employers topped 1 million for the year, as corporate restructuring, artificial intelligence and tariffs helped reduce the workforce. On Wednesday, ADP figures revealed a surprising drop in private sector employment.
Growing signs that the labor market is slowing have Wall Street confident that the Fed will cut interest rates by a quarter of a percentage point at its Dec. 10 meeting, the last of the year. Markets are predicting an 87% chance of a cut next Wednesday, far higher than just a few weeks ago, according to the CME FedWatch tool, SEEbiz reports.
“The markets have done well so far, with a rally in the second half of November, and I think it wouldn’t surprise me to see the markets kind of move sideways from here,” said Tim Holland, chief investment officer at Orion. “The big news is a 25 basis point rate cut, but it’s been so widely reported that I’d be shocked if we don’t get it. The market is expecting it. So maybe after a great 11 months and some recent volatility, we’re just waiting, maybe even until the end of the year, and then we’ll see how 2026 starts.”
On Thursday, investors largely overlooked the latest seven-month jobless claims figures that showed new jobless claims were at their lowest level since September 2022. Jobless claims for the week ended Nov. 29 totaled a seasonally adjusted 191,000, down 27,000 from the previous period and below the Dow Jones consensus estimate of 220,000.
“With every data point that tells us that the bottom is not coming in, I think the markets are breathing a sigh of relief. Even though the initial claims data today was skewed by the Thanksgiving holiday, I think it was very well received,” Holland added. “I don’t think you’re going to get any data next week that will soften Fed tapering.”
The week’s other major economic reports come Friday when the Commerce Department releases delayed September consumption and income data and the personal consumption expenditure index, the Fed’s primary gauge of inflation. The University of Michigan will also release its December consumer survey on Friday.
Salesforce was the key gainer during Thursday’s session, rising more than 3% after the software firm offered a better-than-expected revenue forecast. Five Below also rose after the discount retailer’s earnings beat Wall Street estimates.
