Key Takeaways

  • The S&P 500 enjoys its largest daily gain since March
  • The Federal Reserve holds interest rates at 5.25-5.50%

S&P 500 Success

The S&P 500 saw its best daily growth in half a year, surging 1.89% and notching a second consecutive day of gains. The broad-based index piggybacked on strong earnings and optimism surrounding the Federal Reserve’s rate stance. 

On Wednesday, Federal Reserve Chairman Jay Powell announced that the central bank had decided not to raise further its benchmark interest rate from its current 5.25-5.50% value. The pause didn’t necessarily take the market by surprise, given inflation data released throughout last week reiterated that the Fed’s strategy to battle inflation with higher-for-longer rates is slowly, but surely, working. Although the statement leaned more on the dovish side for now, Powell was careful to leave the light on for a possible rate hike in future. 

Even more, coffee chain Starbucks reported impressive earnings Thursday, sending its shares flying 9.5% and securing its position as a top performer on the S&P 500 index. Sales were up 4% for the coffee giant in their third quarter, while earnings per share (EPS) rose to $1.06, scrubbing analysts’ $0.97 predictions.

All that being said, the increases weren’t isolated to the S&P 500 alone. The tech-heavy Nasdaq joined its more diverse peer with an advance of 1.78%, while the Dow Jones Industrial Average followed suit with a slightly lesser 1.69% uprise.

Jobs, Jobs and More Jobs

The US Bureau of Labor Statistics will release October’s nonfarm payroll (NFP) data later today. Economists predict 189,000 jobs created in October, which feels like a modest forecast given the 336,000 jobs added in September that caught the market off guard. 

The NFP data does not take agricultural businesses into account, but it also excludes government employees, the self-employed, and those employed by non-profit organizations. Monitored closely by the Fed, the print carries a link directly to the markets, as some view it as a primary indicator of economic health.

In a nutshell, the market will be tuning in to the NFP report for some essential key insights into the labor market situation. As a general rule, it’s best to take the information and analyze it to formulate your next market moves. Pay attention to the upcoming data release and use it to your benefit to help build your winning strategy.