Markets

Here's what happened to the market on Thursday

VIDEO1:2001:20
News Update – Market Close

Dow Jones Industrial Average rises 122 points

The Dow gained 122.42 points, or 0.47% to close at 2,6201.04. The S&P 500 climbed 0.8% to 2,910.63. The Nasdaq Composite advanced 1.12% to 7,872.26. Thursday's gains chipped away at the market's massive two-day sell-off to start off the fourth quarter.

Faith in the Fed boosts stocks

Stocks rose after the possibility of lower interest rates from the Federal Reserve increased. Expectations of a 25 basis-point rate cut rose to 88.2% on Thursday from 77%, according to the CME Group's FedWatch. Lower rates makes it cheaper for companies to borrow money for corporate buybacks or grow their businesses.

Expectations for a rate cut rose after the release of disappointing U.S. services data from the Institute for Supply Management. ISM said the U.S. services sector grew at its slowest pace since August 2016. Stocks briefly plunged after the data was released at 10 a.m. ET, before staging a sharp recovery. At its low of the day, the Dow was down more than 300 points.

Big tech leads, banks lag

Shares of big-tech companies such as Facebook, Apple, and Alphabet outperformed on Thursday, offsetting losses from bank stocks. Facebook climbed more than 2.7% while Apple and Alphabet gained 0.85% and 0.98%, respectively. J.P. Morgan Chase slid 0.14% while Bank of America pulled back 0.11%.

What happens next?

Wall Street will keep its eyes on economic data as the U.S. government is scheduled to release the September jobs report. The U.S. economy is forecast to have added 145,000 jobs in last month, according to a Dow Jones estimate. Consumer sentiment numbers are also set for release on Friday. Read more here.

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