The major U.S. stock indexes all rose sharply Friday, bouncing back from the previous day’s declines.
The S&P 500 added 1.2% and the tech-focused Nasdaq Composite Index rose 1.2% as of Friday afternoon. The Dow Jones Industrial Average was up more than 500 points.
It was shaping up to be a positive end for a turbulent week for stocks amid broad concerns about the U.S. labor market and about whether Big Tech companies — responsible for much of the market’s gains this year — will be able to justify their sizable investments in artificial intelligence.
Even with Friday’s rally, the S&P 500 was down about 1.3% on the week. It’s up almost 13% on the year. The Nasdaq is similarly down 1.9% on the week and up 16% for the year.
Two major U.S. companies were crucial to the week’s bumpy ride: Nvidia and Walmart.
Nvidia, now the world’s most valuable company thanks to its dominance of the AI computer chip market, reported strong earnings, adding a boost on Wednesday. Walmart earnings on Thursday added to that positive outlook.
But a middling jobs report — showing a solid 119,000 jobs added in September but downward revisions in other months along with a slightly higher unemployment rate — offered a more pessimistic outlook. Persistent inflation combined with a job market that isn’t weak enough to warrant immediate alarm have put the Federal Reserve in a tough position when it comes to setting interest rates.
Interest rate cuts generally make borrowing money easier throughout the economy and usually boosts investor appetite for stocks. Expectations of a cut had declined sharply Thursday, but they were given a jolt on Friday when John C. Williams, president of the Federal Reserve Bank of New York, said that he thought another rate cut could be in order.
In October, the Fed cut its benchmark interest rate for the second time this year. President Donald Trump has been pushing for even deeper reductions in the rate.
CME Group’s FedWatch, which tracks traders’ expectations for a rate cut, showed Friday that odds for a rate cut where a little over 70% — up from 39% on Thursday but down from 98% in October. Those swings underline just how much the state of the economy — or at least opinions about it — remain in flux.
However tough the week on Wall Street was, crypto investors had it worse. Bitcoin continued to drop on Friday, briefly touching $80,000 per bitcoin. The digital currency recovered some losses to trade around $84,000 as of Friday afternoon, down about 12% on the week — significantly lower than its all-time high of more than $126,000 in October.