Stocks opened higher Friday as investors digested the latest data on the US labor market.
The Dow rose 171 points, or 0.35%. The S&P 500 gained 0.2%. The tech-heavy Nasdaq Composite edged higher but was relatively flat.
The US economy added 50,000 jobs in December, according to data published this morning by the Bureau of Labor Statistics. The payrolls number was slightly below economists’ forecasts for 55,000 jobs, but the unemployment rate ticked down to 4.4% from a revised 4.5% in November.
Traders are now pricing in just a 5% chance that the Federal Reserve cuts interest rates at its policy meeting later this month, according to CME FedWatch. That’s down from a roughly 14% chance earlier this morning and 22% chance one month ago.
“The prospect of a January Fed rate cut has all but vanished following the unexpected drop in the unemployment rate,” Seema Shah, chief global strategist at Principal Asset Management, said in a note.
Stocks moved higher as the tick-down in the unemployment rate could ease concerns about an economic slowdown, according to José Torres, senior economist at Interactive Brokers.
Market sentiment on Friday was “neutral,” according to CNN’s Fear and Greed Index.
“The stock market is likely to remain cautiously optimistic this year, but upside will be capped until confidence in the underlying job market — and therefore the longevity of this economic expansion — comes back,” Chris Zaccarelli, CIO at Northlight Asset Management, said in a note.