S&P 500: Health Care and Consumer Stocks Drive Gains Amid Mixed Market Momentum

Financial Markets Surge on Jobs Data but Show Signs of Fatigue

U.S. markets posted mixed but significant movements on Friday, with the S&P 500 and Nasdaq achieving new record highs. A strong November jobs report boosted expectations for a December Federal Reserve rate cut, while analysts noted subtle signs of cooling investor enthusiasm across key sectors.

Jobs Report Drives Index Records

The S&P 500 climbed 0.2% and the Nasdaq advanced 0.6%, both reaching new intraday records, as traders responded positively to a stronger-than-expected labor market. Nonfarm payrolls rose by 227,000 in November, beating the 214,000 forecast, though the unemployment rate nudged up to 4.2%. The Dow Jones Industrial Average lagged slightly, slipping 48 points, or 0.1%, weighed down by a sharp decline in UnitedHealth shares.

Friday’s data strengthened bets on a 25-basis-point Federal Reserve rate cut in December, with probabilities rising above 90%. Analysts, including Morgan Stanley, reiterated expectations for easing at the Fed’s Dec. 17-18 policy meeting, citing the balance between robust employment gains and an uptick in unemployment.

Sector Strength Led by Health Care and Discretionary Gains

November’s job creation was concentrated in health care and social assistance, which added 72,300 jobs, followed by leisure and hospitality (+53,000) and government (+33,000). However, Wolfe Research highlighted fatigue in the broader market, as equal-weighted indices underperformed their cap-weighted counterparts. Post-election winners like transports and banks have declined by over 5% from recent highs, suggesting waning momentum in these sectors.

Consumer discretionary stocks outperformed, with Lululemon Athletica surging 18% after raising its full-year forecasts. Ulta Beauty also posted strong gains, rising 9.5% on upbeat profit guidance. These moves pushed the sector to an all-time high, countering headwinds from UnitedHealth’s 5.2% drop, which weighed on the Dow.

Caution in Technology and Bitcoin Markets

Semiconductor stocks may experience near-term volatility due to potential disruptions in AI supply chains, according to UBS. The bank recommended using pullbacks to build positions in quality AI-focused names, noting manageable risks at this stage.

Meanwhile, Citi analysts warned that Bitcoin’s historic rise above $100,000 might face pressure from economic uncertainty. Regulatory developments and a potential shift toward non-BTC tokens could impact Bitcoin’s dominance going forward.

Market Forecast: Mixed but Leaning Bullish

While the labor market and discretionary sectors support a bullish narrative, fatigue in financials and transport stocks raises caution for broader equity indices. Technology remains a mixed bag, with both risks and opportunities in semiconductors and AI-related names. Traders are likely to stay focused on Fed policy signals in the coming weeks, positioning portfolios ahead of the expected rate cut. In the short term, the market leans bullish, though sector-specific volatility could present selective buying opportunities.

More Information in our Economic Calendar.