The Dow Jones Industrial Average faced further decline on Friday, losing approximately a third of a percent as the trading week concluded.
The release of the US Nonfarm Payrolls (NFP) jobs figures brought a mixed bag of news. The net jobs count in November rebounded strongly, reaching 227K, which was above the forecasted 220K and a recovery from the revised 36K in October. However, the US Unemployment Rate also rose to 4.2% as anticipated, up from 4.1% in the previous month. This increase in reported unemployed consumers dampened the overall positive sentiment in the market, capping the bullish momentum across global equity markets.
In the wake of these economic data, markets have increased their expectations of a 25 bps rate cut from the Federal Reserve on December 18. Rate traders have significantly ramped up the odds of at least a quarter-point reduction in two weeks, with the probability now at 85%, while only 15% still anticipate a hold from the Fed.
Regarding Dow Jones news, the index presented a somewhat balanced picture on Friday. Although half of the stocks listed on the board managed to rise during the day’s trading, significant losses at the lower end pulled down the overall average. Amazon (AMZN) was a standout performer, surging 3% and surpassing $227 per share as its share price continued to ascend to record highs.
Conversely, UnitedHealth Group (UNH) was a major drag on the Dow Jones. It plummeted another 5% and dropped below $550 per share following the tragic shooting of the CEO of its insurance arm, UnitedHealthcare, in New York this week. The incident, which occurred as the executive was en route to a shareholder’s meeting, has drawn attention to the company’s practices, with reports suggesting that it has a high rate of claim rejections and has allegedly handed over client health claims control to an AI with a 90% inaccuracy rating.
Looking at the Dow Jones price forecast, despite the further softening on Friday and a down week, the index remains firmly in bullish territory and is trading above 44,500. Although it slipped back below the 45,000 key level this week, bearish pressure has been relatively mild. Year-to-date, the Dow Jones has registered an impressive gain of over 18%, with a nearly 7.6% increase in November alone. Even if there is an extended pullback to the 50-day Exponential Moving Average (EMA) at 43,350, it is likely to encounter fresh support as investors remain eager to bid.
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