U.S. stocks are rising after December jobs report eases rate fears

By Liz Moyer

Investing.com -- U.S. stocks rallied after jobs data showed a cooling labor market, easing investor concerns about rising interest rates.

At 11:01 ET (16:01 GMT), the Dow Jones Industrial Average was up 518 points or 1.6%, while the S&P 500 was up 1.5% and the NASDAQ Composite was up 1.4%.

Futures had already jumped after December’s jobs report showed a slightly cooling labor market, with average hourly earnings dipping lower. Investors were hoping for signs the labor market was slowing down, which could encourage the Fed to ease off its pace of interest rate increases.

Still the report was slightly stronger than expected. Nonfarm payrolls rose 223,000 last month, below November’s pace but beating the consensus forecast for 200,000. The unemployment rate dipped to 3.5% compared with the 3.7% expected. That puts the jobless rate at a 50-year low.

Average hourly earnings rose 0.3% against expectations for 0.4%.

Worries about a still-tight labor market weighed on stocks in recent days as investors feared the Fed had reasons to keep inflation higher for longer. Fed officials have said they expect rates to rise above 5%, emphasizing the need to keep rates elevated to combat inflation. Investors have been hoping for a pause or eventual pivot.

The Fed next meets in February, when it is expected to raise rates by a quarter of a percentage point. That would be a slower pace than the half-point hike in December and the three-quarter percentage point hikes at each of the four meetings before that.

Tesla Inc (NASDAQ:TSLA) shares were falling 1.3% after the electric vehicle maker cut prices in China for the second time in less than three months. Bed Bath&Beyond Inc (NASDAQ:BBBY) shares also tumbled, falling another 16.8% on Friday after telling investors it was considering options including bankruptcy.

Silvergate Capital Corp (NYSE:SI), a crypto bank, also saw shares falling 9.6% after JPMorgan said rising withdrawals are a reason for concern. The analysts cut their rating to neutral from overweight. 

Oil rose. Crude Oil WTI Futures were up 1.6% to $74.88 a barrel while Brent Oil Futures were up 1.3% to $79.78 a barrel. Gold Futures were up 1.4% to $1867.