Stocks rose as the December jobs report came in strong

Stocks rebounded again on Friday as investors digested more strong labor market data that will play into expectations of interest rate cuts.

The Dow Jones Industrial Average (^DJI) rose 0.3%, or about 120 points. The S&P 500 (^GSPC) rose 0.5% while the tech-heavy Nasdaq Composite (^IXIC) advanced 0.6%.

Major indexes were initially divided after the release of the US December jobs report, which showed that the US economy added 216,000 jobs in December, higher than the 175,000 that economists had expected. The unemployment rate was unchanged at 3.7%.

Separate data from the Institute for Supply Management (ISM) showed services activity slowed in December. The services PMI for the month came in at 50.6, down from November's reading of 52.7. While a reading above 50 indicates expansion, the December number represents the lowest level of services activity since May.

Stocks fell in the first week of 2024 in a notable reversal of the massive rally fueled by high hopes that the Federal Reserve will soon begin easing monetary policy. But doubts have emerged about whether policymakers are willing to pivot.

Read more: What a pause on federal interest rate hikes means for bank accounts, CDs, loans and credit cards

Against this backdrop, US bond yields continued to rise, with the 10-year Treasury yield (^TNX) rising 3.7 basis points to 4.04% after rising on Thursday.

Elsewhere, iPhone supplier Foxconn (2354.TW) said it expects revenue to decline in the first quarter amid slowing market demand. Shares of Apple (AAPL) fell in premarket trading, adding to losses after two analysts downgraded the iPhone maker over concerns about sales of its next smartphone.

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He lives4 updates

  • OpenAI aims to strike more licensing deals with publishers

    The maker of popular AI-powered chatbot ChatGPT is in talks with dozens of publishers to license their articles, Bloomberg reported on Thursday. The agreements will help the startup train its AI models while compensating publishers for the content they produce.

    The effort to expand licensing deals comes as The New York Times has filed a lawsuit against Microsoft (MSFT) and OpenAI over allegations of copyright infringement. The news outlet claims that the AI ​​companies engaged in widespread copying, hijacking Times journalism to train their own chatbots. The lawsuit is the latest in a broader dispute over how courts view the legality of training large language models using published works found on the Web without permission or compensation.

    While some publishers have already signed deals with OpenAI and other AI companies, the Times is among a class of creative outlets that have publicly challenged how tech companies train their AI tools.

    “We're in the middle of many negotiations and discussions with many publishers. They're active. They're very positive. They're progressing well,” Tom Rubin, head of intellectual property and content at OpenAI, told Bloomberg. “You've seen the deals announced, and there will be more to come.” the future.”

    Regardless of how these deals are implemented, advocates for individual creators have raised concerns that professionals on the smaller side of media production will be excluded from potential licensing agreements. Without intervention from Congress or the courts, work-for-hire artists will have few resources to challenge AI companies even when their work is understood by linguistic models, said Rick Allen, co-founder of Nautilus Productions, a video production company. big. And the production house.

    “It's interesting that these negotiations by OpenAI, which jealously guards its own intellectual property, recognize that other people's content has value,” he said.

  • Investors are anticipating interest rate cuts even after the hot jobs report

    New labor market data surprised Wall Street.

    The labor market added 216,000 jobs in December, up from 173,000 the previous month, and exceeding the expectations of economists surveyed by Bloomberg, who expected 175,000.

    While the data at first glance reflects good news for workers and the companies that employ them, the strong numbers also complicate expectations about the Federal Reserve's interest rate policy for the coming months.

    “Friday's jobs report was so strong that it will likely delay the timing of the Fed's final interest rate cuts,” said Jeremy Stroup, CEO and chief investment officer at Coastal Wealth. “The economy is clearly strong enough so far to withstand the Fed's currently high interest rates.”

    For much of Wall Street, the end of the Fed's tightening campaign will represent a victory for the economy, especially for investors who have been pressured by high interest rates, which increase the cost of borrowing and restrict growth.

    The hot jobs report may have initially rattled interest rate cut expectations, but investors are still leaning toward the possibility of the Federal Reserve cutting interest rates at its March 20 meeting.

    Investors expect a roughly 74% chance of a rate cut after the March meeting, according to CME FedWatch tool.

  • Stocks rise after strong jobs report surprised Wall Street

    Stocks opened slightly higher on Friday as investors looked for direction after a strong jobs report rattled expectations of the Federal Reserve cutting interest rates.

    The surprising jobs report could put pressure on the Federal Reserve to hold interest rates steady and delay its first rate cut, dashing hopes that the tightening campaign has reached an end.

    The Dow Jones Industrial Average (^DJI) rose just above the flat line. The S&P 500 (^GSPC) rose 0.3%, while the tech-heavy Nasdaq Composite (^IXIC) advanced 0.2%.

  • The US economy added 216,000 jobs in December, sending stocks lower

    The US economy added 216,000 jobs in December, while the unemployment rate remained unchanged at 3.7%, according to the Bureau of Labor Statistics.

    Yahoo Finance's Josh Schaeffer has all the details here.

    Stocks fell after the report as traders trimmed their bets on a Fed rate cut. The three indices fell by more than 0.4% in pre-market trading.

Click here for in-depth analysis of the latest stock market news and events that move stock prices.

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