Volkswacht Bodensee - US stocks rebound on Amazon results ahead of Fed, election finale

After major indices tumbled Thursday following big drops in Microsoft and Meta, buoyant results from Amazon helped boost the market.

Investors also took the bright side of a weak employment report that showed the US economy added just 12,000 jobs last month, far below expectations in a report that was temporarily distorted by major hurricanes and the Boeing strike.

But on the positive side, the report bolstered the chance that the Fed will reduce interest rates again next week. Futures markets overwhelmingly expect a quarter-point cut.

All three major US indices advanced, led by the tech-rich Nasdaq, which climbed 0.8 percent.

The Amazon report "countered some of the negativity that was building yesterday on the mega-cap" stocks, said Briefing.com analyst Patrick O'Hare.

Analysts expect cautious trading early next week ahead of the US presidential election on Tuesday, with the result possibly delayed for several days.

Oil prices gained following reports that Iran was planning a major retaliatory strike on Israel, reviving the market's geopolitical fears.

Expectations of a major rate cut by the Fed, like the bumper 50 basis point cut in September, have receded after data showed strong economic growth in the United States and inflation just above the central bank's long-term two percent target.

But the "lower-than-expected jobs creation could prompt the Fed to follow through with the widely anticipated 25 basis point cut following their next meeting later next week," said Mahmoud Alkudsi, senior market analyst at ADSS brokerage.

eToro US investment analyst Bret Kenwell said the October jobs numbers "should keep a December rate cut on the table, too."

Major European markets closed the day higher.

London gained 0.8 percent despite lingering fears of the consequences of the Labour government's high-tax, high-spending budget unveiled this week.

Britain's 10-year borrowing rate reached its highest level since November 2023 on Thursday, on fears of a resurgence in inflation.

"Worries continue to swirl about the UK Budget stoking inflation and adding to the debt burden," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

Asian markets closed mixed, with Tokyo down more than two percent as tech shares on the Nikkei were dragged lower following the drop on Wall Street.

Shanghai also ended lower despite a forecast-beating Chinese manufacturing report that boosted hopes for a recovery in the world's second-largest economy.

- Key figures around 2030 GMT -

New York - Dow: UP 0.7 percent at 42,052.19 (close)

New York - S&P 500: UP 0.4 percent at 5,728.80 (close)

New York - Nasdaq Composite: UP 0.8 percent at 18,239.92 (close)

London - FTSE 100: UP 0.8 percent at 8,177.15 (close)

Paris - CAC 40: UP 0.8 percent at 7,409.11 (close)

Frankfurt - DAX: UP 0.9 percent at 19,254.97 (close)

Tokyo - Nikkei 225: DOWN 2.6 percent at 38,053.67 (close)

Hong Kong - Hang Seng Index: UP 0.9 percent at 20,506.43 (close)

Shanghai - Composite: DOWN 0.2 percent at 3,272.01 (close)

Euro/dollar: DOWN at $1.0833 from $1.0884 on Thursday

Pound/dollar: UP at $1.2917 from $1.2899

Dollar/yen: UP at 153.01 yen from 152.03 yen

Euro/pound: DOWN at 83.86 from 84.37 pence

Brent North Sea Crude: UP 0.4 percent at $73.16 per barrel

West Texas Intermediate: UP 0.3 percent at $69.49 per barrel

burs-jmb/jgc

M.Betschart--VB