The Street expected 59,000 jobs. It got 165,000. The unemployment rate fell to 4.1%. Wages grew. And the Nasdaq — the index that crashed 5.5% yesterday — bounced 1.1%. The economy just gave the market the strongest jobs report of the year, and the market couldn't decide if that was good news or bad.
The Close
Mixed close to end the wildest week of the year. The Nasdaq gained 1.1% to 24,579, clawing back a fraction of Thursday's 5.5% crash. The S&P 500 edged up about 0.4%. The Dow slipped. Five sectors finished green. Six didn't.
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| Oct. NFP | +165,000 | vs. 59K est. | ||
| Nasdaq | 24,579.42 | +1.09% | ||
| Unemp. Rate | 4.1% | vs. 4.2% est. | ||
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| Technology | +1.5% | |||
| Comm. Svcs. | +0.4% | |||
| Industrials | +0.3% | |||
| Energy | +0.1% | |||
| Cons. Disc. | 0.0% | |||
| Health Care | −0.1% | |||
| Materials | −0.5% | |||
| Utilities | −0.5% | |||
| Financials | −0.7% | |||
| Real Estate | −0.8% | |||
| Cons. Staples | −1.3% | |||
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Tech led the board at 1.5% — the chip stocks that fell 12% on Thursday bounced as bargain hunters stepped in. Communication services added 0.4%. Industrials gained 0.3%. Energy and consumer discretionary were flat.
On the losing side, consumer staples fell 1.3%. Real estate dropped 0.8%. Financials lost 0.7%. These are the sectors that need lower rates to grow, and the jobs report just told you lower rates aren't coming.
iRhythm fell 30.9% — the day's biggest loser. DraftKings dropped 21.4%. Axon lost 18.4% for a second straight day. On the gainer side, Karman Holdings surged 41.6%, Firefly Aerospace jumped 36.0%, and JFrog rallied 35.3%.
For the week: the Nasdaq fell about 3%, the S&P lost about 2%, and the Dow gave back less than 1%. A post-election rally that lasted one day, a crash that took it all back, a jobs report that landed in between. This was the most volatile week since April.
What The Market Is Pricing In
The economy added 165,000 jobs in October. The Street expected 59,000. That's not a beat. That's a different story than the one the market was telling itself.
Here's where the week leaves you. Monday, the market was scared — tech was selling, oil was crashing, the election was tomorrow. Wednesday, Democrats swept and the Dow gained 1,569 points on the gridlock trade. Thursday, the AI selloff erased all of it and the Nasdaq entered correction territory. Friday morning, the jobs number came out and the story shifted again.
The economy created nearly three times as many jobs as anyone expected. August and September were revised up by a combined 84,000. The unemployment rate ticked down to 4.1%. Wages rose 0.4% in a single month. The labor market isn't slowing. It's running hot — hotter than it was in September, hotter than the Fed wants.
The jobs report just closed the door on rate cuts for the rest of this cycle. A month ago, the futures market gave December a coin flip between hold and cut. After this morning's number, the bet flipped — the market is now pricing the next move as a hike, not a cut. When the economy is growing at 3.4%, creating 165,000 jobs a month, and running unemployment at 4.1%, the Fed doesn't cut. It either holds or it raises. That's the math the bond market locked in this morning.
The Nasdaq bounced anyway. That tells you two things. First, Thursday's selloff was so extreme that the chips were oversold — when Nvidia falls 12% in one day, somebody is going to buy the dip. Second, the chip bounce has nothing to do with the macro picture. It's a trade, not a trend. The macro says rates stay high. The trade says some stocks fell too far too fast. Those are two different conversations.
When stocks go up on bad macro news — and make no mistake, a hot jobs number is bad macro for anyone hoping the Fed eases — it usually means the market hasn't finished repricing. The buyers on Friday are the same ones who sell on Monday when they realize the rate picture hasn't changed. On Wall Street they call this a dead cat bounce — a brief recovery in a falling market that doesn't change the direction. The name is ugly. The pattern is reliable.
After the December 2018 selloff, the market bounced three times before finding its real bottom on Christmas Eve. Each bounce lasted one to three days. Each one felt like the floor. None of them were. The pattern is: crash, bounce, test, repeat. Friday's bounce was step two.
What's Next
Three things I'm watching next week:
01 — December Fed meeting expectations
The jobs report rewrote the rate path. Before Friday, the December FOMC was a hold. Now the futures market is pricing an 83% chance of a hike. Watch the Fed speakers next week — if two or three governors come out in favor of raising in December, the 10-year yield pushes back above 5% and the rate-sensitive trade stays under pressure. If they push back and signal patience, the bond market recalibrates and the correction gets a floor.
02 — The Nasdaq correction — where's the floor?
The Nasdaq is down more than 10% from its October 6 high. Friday's bounce was 1.1% — a fraction of Thursday's 5.5% crash. If the Nasdaq holds above 24,000 next week, the correction is orderly and the market stabilizes. If it breaks below 24,000, the next support level is around 23,200 — another 5% lower. Watch Monday's open. The first hour tells you if the bounce has legs.
03 — Oil and the ceasefire
Brent crude fell below $100 this week on ceasefire hopes after the Democratic sweep. If the diplomatic talks produce something concrete over the weekend, oil stays down and the inflation picture improves. If they stall, oil bounces and the CPI outlook for November and December gets worse. The oil price is the connective tissue between the election, the Fed, and the market. It's the one variable that changes everything else.
The economy just told you it's strong. The Fed just told you it's hawkish. The market just told you it's confused. That's where November starts.
That's it for today. Have a good weekend. I'll be back on Monday after the close.
