Stocks Rise as Bets Fed Will Cut Sink Bond Yields: Markets Wrap
(Bloomberg) — More evidence of a slowdown in the US jobs market reinforced bets the Federal Reserve will cut interest rates in its final policy meeting of 2025, driving stocks higher while bond yields dropped alongside the dollar.
Equities held gains in early New York trading, with the S&P 500 poised to advance for the seventh time in eight days. Treasuries rose across the curve, driving two-year yields below 3.5%. The dollar dropped against all of its developed-market peers. Bitcoin kept climbing as traders look for signs that the crypto market may be regaining its footing after a prolonged selloff.
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US companies shed payrolls in November by the most since early 2023, adding to concerns about a more pronounced weakening in the labor market.
Private-sector payrolls decreased by 32,000, according to ADP Research data released Wednesday. Payrolls have now fallen four times in the last six months. The median estimate in a Bloomberg survey of economists called for a 10,000 gain.
“This removes any doubt about a 25 basis-point cut next week and will likely contribute to a neutral (not hawkish) cut,” said Ian Lyngen at BMO Capital Markets.
S&P 500 futures rose 0.3%. The yield on two-year Treasuries slipped three basis points to 3.48% The Bloomberg Dollar Spot Index fell 0.3%. Bitcoin hovered near $93,000.
“The modest fall in the ADP payrolls measure in November, coming on the back of a similar message from the Fed’s Beige Book, should be enough to persuade the FOMC to vote for another cut next week,” said Stephen Brown, at Capital Economics.
Looking through the month-on-month volatility, however, Brown noted that the broader message from the alternative indicators appears to be that labor market conditions are stable rather than deteriorating markedly.
“Accordingly, the Fed is still likely to accompany a further cut next week with more hawkish messaging about the prospect for future loosening,” he said.
As Fed policymakers gather next week, the debate among officials will largely center on the job market and whether rates should be reduced for a third straight time.
While the latest government report showed a larger-than-expected rise in payrolls, the gain was concentrated in just a few industries. The unemployment rate ticked up to an almost four-year high, and there’s been a steady drumbeat of layoff news from companies.
“Right now, the data argues for additional Fed funds rate cuts. US labor demand is weak, consumer spending is showing early signs of cracking, and upside risks to inflation are fading,” said Elias Haddad at Brown Brothers Harriman & Co.
Corporate Highlights:
Macy’s Inc. slid as its profit forecast for the current quarter disappointed investors, overshadowing solid results in the lead-up to the holiday shopping season. American Eagle Outfitters Inc. posted third-quarter results that outpaced expectations and raised its outlook as the apparel chain pivots quickly from weakness earlier this year. Marvell Technology Inc. rallied in premarket trading after reassuring investors that its custom chip-design unit is winning repeat orders, signaling continued growth as the company benefits from runaway spending on AI computing. Uber Technologies Inc. is launching autonomous rides with Avride Inc. in Dallas as part of a previously announced partnership, marking the latest US city where the ride-hailing giant is offering such a service. Royal Bank of Canada beat estimates on strong results in its capital-markets and wealth-management divisions, capping off a year of brisk trading activity, and set higher targets for returns on shareholders’ capital. National Bank of Canada beat estimates on better-than-expected results at its capital-markets unit in the fiscal fourth quarter, a resurgence for the division after it posted strong results earlier in the year but missed forecasts in the previous quarter. Glencore Plc plans to boost annual copper production to about 1.6 million tons by 2035 as the miner seeks to reverse a slump in its output of the metal, but was also forced to lower its ambitions for next year. Hugo Boss AG forecast a decline in sales and earnings next year as the German fashion house seeks to recover from a challenging period by streamlining its product range and raising prices. Zara owner Inditex SA’s sales accelerated in November, highlighting its resilience in the face of weakening consumer sentiment that’s hitting many of its peers. Shares soared the most in five years. At least three investors in a China Vanke Co. bond maturing this month have signaled to the embattled developer that they will oppose a plan to delay repayment, people familiar with the matter said. Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.3% as of 8:37 a.m. New York time Nasdaq 100 futures rose 0.2% Futures on the Dow Jones Industrial Average rose 0.2% The Stoxx Europe 600 rose 0.1% The MSCI World Index rose 0.1% Currencies
The Bloomberg Dollar Spot Index fell 0.3% The euro rose 0.4% to $1.1670 The British pound rose 0.7% to $1.3308 The Japanese yen rose 0.3% to 155.44 per dollar Cryptocurrencies
Bitcoin rose 1.7% to $93,199.89 Ether rose 3.2% to $3,094.11 Bonds
The yield on 10-year Treasuries declined three basis points to 4.06% Germany’s 10-year yield declined one basis point to 2.74% Britain’s 10-year yield declined three basis points to 4.44% The yield on 2-year Treasuries declined three basis points to 3.48% The yield on 30-year Treasuries declined two basis points to 4.73% Commodities
West Texas Intermediate crude rose 1.2% to $59.33 a barrel Spot gold rose 0.3% to $4,219.21 an ounce ©2025 Bloomberg L.P.
