The Dow Jones (DJIA) was up as much as 1.5% on Thursday, driven by a strong quarter from Nvidia (NVDA), but has since given back all of its gains as investors digest September’s jobs report.
TipRanks Black Friday Sale
The Bureau of Labor Statistics (BLS) announced that nonfarm payrolls increased by 119,000, more than double the consensus economist estimate of 50,000. However, August’s payrolls were revised from a gain of 22,000 to a loss of 4,000. Additionally, the unemployment rate inched higher by 0.1% to 4.4%, the highest level since October 2021.
“Bottom line: The economy added an average of 44k jobs a month for the past 4 months. That’s barely ‘treading water’ and explains why unemployment is now 4.4% –> highest since Oct 2021,” said Navy Federal Credit Union Chief Economist Heather Long in an X post.
It’s worth noting that the report was delayed by over six weeks because of the government shutdown, making the information outdated. The BLS added that it would publish October’s nonfarm payrolls and November’s jobs report on December 16.
A weaker labor market supports lower interest rates because it signals softer economic demand, allowing the Fed to cut rates to stimulate growth. The odds of a 25 bps rate cut at the December 9-10 Federal Open Market Committee (FOMC) meeting rose following the data, climbing to 39.6% compared to 30.1% a day ago.
Meanwhile, Fed Governor Lisa Cook warned of an “increased likelihood of outsized asset price declines” given elevated valuations in equities, bonds, and housing markets. At the same time, Cook said she doesn’t expect a potential drop in asset prices to pose a risk to the overall financial system.
The Dow Jones is down by 0.69% at the time of writing.
Which Stocks are Moving the Dow Jones?
Let’s pivot to TipRanks’ Dow Jones Heatmap, which illustrates the stocks that have contributed to the index’s price action.
Nvidia (NVDA) has given back all of its earnings gains and is now trading in negative territory, surprising many investors and fueling fears of an AI bubble.
Meanwhile, Walmart (WMT) is the top performer in the Dow Jones after the retailer reported third-quarter revenue of $179.5 billion, topping the consensus analyst estimate of $177.43 billion. Its adjusted EPS of 62 cents was also higher than the estimate of 60 cents.
Elsewhere, all four stocks within the industrials group are trading lower, led by Boeing (BA). BA stock is now down by about 18% over the past month. Amazon (AMZN) is also in the red ahead of Black Friday, which falls on November 28.
DIA Stock Moves Lower with the Dow Jones
The SPDR Dow Jones Industrial Average ETF (DIA) is an exchange-traded fund designed to track the movement of the Dow Jones. As a result, DIA is falling alongside the Dow Jones today.
Wall Street believes that DIA stock has room to rise. During the past three months, analysts have issued an average DIA price target of $532.74, implying upside of 15.99% from current prices. The 31 holdings in DIA carry 29 buy ratings, two hold ratings, and zero sell ratings.
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