The Dow Jones index has suddenly risen by 290 points after a jobs report release, meaning a positive Dow Jones forecast. This first week in October was not looking too promising for the stock market. However, Friday saw a sudden shift in fortunes with this new report before possible weekend Dow trading. Investors were very impressed by the data they saw. The figures far exceeded expectations.
So the Dow Jones rose by 0.9%, and the S&P 500 shot up 1.2% in a very short amount of time. Meanwhile, the Nasdaq has climbed 1.6%, an index that is heavily reliant on tech.
So, as for the data itself, there have been signs that the labour market was still keeping strong over September. 336,000 new jobs came into the economy in the US, double what analysts expected. The labour market being so strong, the Fed will likely react in response. A thriving labour market means that the Fed can be less hawkish on interest rates and may possibly even reduce them. This would be great news for borrowers and a good time for Dow Jones investing.
Dow Jones Forecast Amidst Bond Market Uncertainty
The release of the report is very timely, as it comes just before a policy meeting by the Fed. Another sector the Fed will be looking at is the bond market. A Fed official has stated that if bond yield levels remain high, there may be no need to increase interest rates in the near future. In fact, bond yields have been increasing recently in response to the jobs report this Friday. In particular, the 10-year bond yields went over the 4.8% point.
The selling of bonds is likely to continue, according to some. There seems to be no clear reason as to why it should stop any time soon. Only a heavy downturn in the stock market could cause such a result and sour the Dow Jones forecast.
