The Stock Market Ended a Volatile Week With Gains

A significant boost from Intel and Amazon helped lift U.S. stocks, rounding out a turbulent week on a positive note.

‍

Despite a weaker-than-expected October jobs report, the three main U.S. stock indexes rallied, with gains picking up through the day. Intel’s stock surged 7.8% following the announcement of one of its largest losses to date; however, the company provided optimistic guidance for sales growth in the current quarter that exceeded analysts’ expectations. Amazon’s shares also rose by 6.2%, driven by strong revenue and profit growth in its third-quarter results.

‍

This momentum helped the stock market recoup some of its losses from the previous session, which had seen concerns around Meta and Microsoft’s earnings drag the tech-heavy Nasdaq Composite to its worst daily performance in nearly two months. By Friday, sentiment had stabilized, and many investors viewed it as an opportunity to “buy the dip.” The Nasdaq ended the day up by 0.8%, the S&P 500 gained 0.4%, and the Dow Jones Industrial Average added 289 points, or 0.7%.

‍

Colin Graham, head of multi-asset strategies at Robeco, remarked, “We still think that the U.S. economy is ahead of other economies—it’s the engine of growth for the global economy.”

‍

One exception was Apple, which weighed on the Dow by slipping 1.2%, even after the tech giant reported record revenue for the last quarter.

‍

In the bond market, movements were even more pronounced as Treasury yields continued to climb. The 10-year Treasury yield, an important gauge of borrowing costs in the U.S., wrapped up October with its largest monthly rise since April. It extended those gains into November, closing on Friday at 4.361%, its highest since early July. The yield on the 10-year has risen for seven consecutive weeks, the longest streak since October 2022.

‍

Initially, Treasury yields dipped on Friday following the release of the October jobs report, which showed just 12,000 new jobs were added, far below the 100,000 expected by economists. Some analysts pointed out that hiring figures may have been impacted by recent hurricanes and the Boeing machinists' strike, and yields bounced back as traders processed the report. Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott, described the jobs report as “noisy,” reflecting the unpredictable elements affecting the numbers.

‍

Investors also have their eyes on the upcoming election, just days away, which has added an additional layer of uncertainty. Many traders have been increasing bets on potential election outcomes through prediction markets, while others are making strategic bets on specific stocks and sectors based on anticipated policy shifts.

‍

One widely held belief on Wall Street is that the federal budget deficit could grow in the coming years, particularly if former President Donald Trump wins next week’s election alongside a strengthened Republican presence in Congress. An expanding deficit would likely lead to an increase in government bond issuance, potentially putting pressure on the value of existing Treasury bonds.

‍

In the meantime, shares of Trump Media & Technology Group, the social-media startup linked to Donald Trump, fell for the third consecutive day. The stock closed down about 14% on Friday, bringing its three-day loss to over 35%, as volatility ramped up ahead of election week.

‍

Shares of Super Micro Computer also took a hit, dropping 11% on Friday. This decline added to a 45% loss for the week after the company’s auditor, Ernst & Young, resigned and stated it could no longer rely on the company’s management’s representations.

‍

This busy week showcased the market’s ongoing resilience despite several obstacles, from weak economic data to uncertainties around high-profile earnings.

‍