Stocks rallied higher Friday even as stronger-than-expected labor market data impacted outlooks on the Federal Reserve's next moves. The Dow Jones Industrial Average rose more than 280 points, while the S&P 500 Index and Nasdaq Composite added about 1.2% and 1.6%, respectively.
Here's how the market settled to close out the week:
S&P 500 Index (NYSE: SPY): +1.18% or +50.31 points to 4,308.50
Dow Jones Industrial Average (NYSE: DIA): +0.87% or +288.01 points to 33,407.58
Nasdaq Composite Index (NASDAQ: QQQ): +1.60% or +211.51 points to 13,431.34
In the spotlight, non-farm payrolls grew by a stunning 336,000 in September, the Labor Department reported Friday, blowing past estimates for 170,000 additions. Beneath the headline, average hourly earnings rose by a less-than-expected 0.2% for the month and 4.2% from a year ago.
Much of the gains were seen in the leisure and hospitality sector, with 96,000 additions. Other gains were seen by the government sector at 73,000 and the health care and social assistance sector at 65,900. The only sector that saw loss in September was the information sector, which declined by 5,000.
Following the report, market participants expectations for the Fed to raise interest rates in its December meeting grew to nearly 40%, according to CME Group's FedWatch tool. Most traders are pricing in a roughly 90% chance that policymakers will hold rates at their current level between 5.25% to 5.50% at their upcoming meeting in early November.
On the earnings front, Levi Strauss (NYSE: LEVI) shares slipped after the apparel brand posted weaker-than-expected third-quarter revenue and offered disappointing guidance. For the fiscal year, Levi expects earnings in the lower end of its previous forecast of $1.10 to $1.20 per share and revenue at 1% growth, lower than prior guidance of 1.5% to 2.5%.
"We have commenced an initiative to review our operating model and cost structure that should drive agility and material cost savings beginning in 2024," CFO Harmit Singh said in a statement.
Bernstein said Disney (NYSE: DIS) is the "only credible challenger to Netflix (NASDAQ: NFLX)," late Thursday, with the firm initiating coverage of the stock with a Buy rating.
"Despite our bearish view on Linear vs. consensus, we are bullish on DIS's potential to transition to DTC [direct to consumer] at scale once combined with Hulu," analyst Laurent Yoon wrote in a research note, quoted by CNBC. "We forecast DTC growth to outpace Linear decline, supporting overall growth of Media, with DTC revenue surpassing Linear revenue in 2024, and Disney becoming the undisputed #2 subscription video on demand."
Looking ahead, investors will be trading with September's producer price index, consumer price index and consumer sentiment readings in mind.