The Dow, S&P 500, and Nasdaq are expected to continue their downward trend for three consecutive days as the U.S. stock market rises.

What is driving the market

U.S. stocks this week struggled to build on November’s momentum as traders worried that one of the best months for stocks in the past decade may have overextended the market.

Some worry that markets may have priced in up to five interest rate cuts from the Federal Reserve in 2024 too quickly. This caused stock prices to soar and Treasury yields to plummet.

But data on job openings and private-sector salaries released earlier this week helped floor stocks somewhat by reinforcing expectations that Friday’s Labor Department jobs report could come in below expectations, portfolio manager Michael Lebo said. Witts said. From RIA Advisors.

In theory, that would at least increase the likelihood of a rate cut next year.

“I think the market as a whole is expecting lower-than-expected results because we saw relatively weak reports for ADP and JOLTS,” Lebowitz said in a phone interview with MarketWatch. The median forecast of economists surveyed by the Wall Street Journal predicts 190,000 new jobs will be created.

“The way the market is interpreting it is that the Fed is closer to easing and will not be raising rates any more,” Lebowitz said.

Investors need to be careful what they wish for. While traders seem to think that interest rate cuts will help stocks rise, Lebowitz points out that in most cases the market’s reaction is just the opposite.

Traders received another labor market update Thursday with the release of weekly data on jobless claims. The number of Americans applying for unemployment benefits last week was little changed at 220,000.

see: Unemployment claims up to 220,000, layoff rates still low

On Thursday, technology stocks Alphabet Inc. GOOGL’s stock took the lead.
and Advanced Micro Devices AMD
One of the biggest gains for the Nasdaq Composite.

Lebowitz noted that stocks this week have embraced a “Dow or Nasdaq” dynamic, with the Dow or Nasdaq rising. This is evidence that mutual funds may be able to separate some of their holdings from market leaders this year.

Outside of U.S. stocks, investors were closely watching global bond yields after the Bank of Japan said it would soon end its ultra-loose monetary policy, sending local bond yields soaring in a move that has reverberated across global bond markets.

Nikkei 225 stock index

1.8% decline, Japanese yen USDJPY
Japan’s 10-year government bond yield surges 1.3%

It rose 11bp.

The move comes after lower inflation, along with signs of a cooling labor market, helped push benchmark 10-year Treasury yields higher.

It fell from a 16-year high of 5% in October to nearly 4.1% during Wednesday’s session. The likelihood that the Federal Reserve will cut borrowing costs by at least 25 basis points at its March meeting rose to 58.4% from 22% a month ago.

Companies reporting earnings on Thursday include Broadcom AVGO.,
Lululemon Lulu
and DocuSign DOCU
After closing.

A company that attracts attention

• GameStop Co., Ltd. stock GME
  The decline followed the company’s earnings report late Wednesday.

• Dollar General Corp. stock DG
  The discount retailer rose after it topped third-quarter profit estimates.

• JetBlue Airways Corporation Share JBLU
  The surge occurred Thursday morning after the airline raised its fourth-quarter and full-year guidance, saying travel demand remains “healthy.”