Rising US Stocks and Mixed Wall Street Indices
US stocks were rising after labor market data suggested the Federal Reserve could hold off on another interest rate increase when it meets on policy next month. At 10:32 ET (14:32 GMT), the Dow Jones Industrial Average was up 189 points or 0.5%, while the S&P 500 rose 0.4% and the NASDAQ Composite was up 0.2%. However, Wall Street’s main indices closed mixed on Thursday, making August a challenging month for investors. The Dow Jones Industrial Average fell 2.4% last month, the S&P 500 dropped 1.8%, and the Nasdaq Composite slumped 2.2%, all recording their first monthly decreases since February.
August Job Report Influences Fed's Decision
Friday's job report for August was expected to significantly impact the Fed's decision-making later this month. Job openings came in lower than expected, and although nonfarm payrolls rose by 187,000, the unemployment rate also increased to 3.8%. Analysts had predicted the economy would add 170,000 jobs last month, down from 187,000 the previous month, and expected an unemployment rate of 3.5%. Investors interpreted the rise in the unemployment rate as a sign the Fed might decide to hold steady on interest rates next month. According to Investing.com's Fed Rate Monitor Tool, there is now an 88% chance that the US central bank will maintain the target range for the federal funds rate at 5.25% to 5.50%.
Chinese Factory Activity Fuels Economic Recovery Hopes
Chinese factory activity unexpectedly grew in August, offering hope for economic recovery in the world’s second-largest economy. The Caixin manufacturing purchasing managers’ index came in at 51.0 for August, above the 50 level that indicates expansion, and its highest mark since February. However, the private survey data contrasted with the official PMI, which came in at 49.7 on Thursday, suggesting a contraction.
Corporate Updates: Lululemon, Dell Technologies, and Broadcom
In corporate news, Lululemon Athletica (NASDAQ: LULU) stock rose 4.4% after the workout gear maker reported a "solid start" to its third quarter, thanks to strong demand in North America. Additionally, personal computer manufacturer Dell Technologies (NYSE: DELL) raised its annual forecast for revenue and profit, benefiting from the artificial intelligence boom, while chipmaker Broadcom (NASDAQ: AVGO) forecasted current-quarter revenue below expectations due to softening enterprise demand. Dell stock rose 22.6% while Broadcom stock fell 4.5%.
Optimism in Crude Market as Producers Plan Output Cuts
Oil prices rose on Friday, set to register strong weekly gains fueled by optimism that major crude producers would extend output cuts until the end of the year. Russian Deputy Prime Minister Alexander Novak announced on Thursday that Moscow had reached a new deal with its peers in the Organization of Petroleum Exporting Countries and allies, a group known as OPEC+, to further cut supplies and would outline more reductions in production next week. These reductions will likely add to ongoing supply cuts by Russia and Saudi Arabia, presenting a tighter supply outlook for the remainder of the year.