Investing.com -- The Dow Jones Industrial Average and S&P 500 reached record highs on Friday, wrapping up a holiday-shortened trading day and a strong month for the stock market.
The S&P 500 rose 0.56% to close at 6,032.38, while the Nasdaq Composite gained 0.83% to finish at 19,218.17. The Dow climbed 188.59 points, or 0.42%, to end at 44,910.65. Both the Dow and S&P 500 set new records for intraday and closing levels.
Chip stocks contributed to the rally after a Bloomberg report indicated that forthcoming US restrictions on semiconductor equipment sales to China might be less stringent than previously anticipated.
Over the past week, the Dow increased by 1.4%, bringing its November gain to an impressive 7.5%. The S&P 500 and Nasdaq Composite rose 1.1% for the week, ending the month with gains exceeding 5% and 6%, respectively. November marked the strongest monthly performance of the year for both the Dow and S&P 500.
The key focus for this week will be the release of the November employment report on Friday. Strategists at JPMorgan (NYSE:JPM) project nonfarm payrolls to increase by 275,000, rebounding from October’s modest gain of 12,000.
This expected growth includes a boost of approximately 125,000 jobs, attributed to the resolution of the Boeing (NYSE:BA) strike and workers returning after disruptions caused by hurricanes Helene and Milton.
For the unemployment rate, the strategists foresee a slight rise to 4.2%, up from October’s 4.1%, as these special factors are likely to have a smaller impact on this measure.
“Looking past the monthly volatility in job growth, we expect that the underlying trend is not much different from the 148k per month average that had persisted in the three and six months prior to October,” strategists led by Michael Feroli said in a note, though this pace may eventually be subject to downward revisions.
Ahead of Friday's employment report, key data releases earlier in the week include the JOLTS report on Tuesday and ADP (NASDAQ:ADP) employment data on Wednesday.
The week also brings several significant sentiment indicators in the US. On the corporate front, this includes the ISM manufacturing index on Monday and the ISM services index on Wednesday, with particular attention on their employment and pricing components.
Busy earnings week ahead
This week’s earnings lineup features several high-profile reports likely to capture market attention.
Zscaler (NASDAQ:ZS), a cloud security company, kicks things off on Monday, followed by Salesforce (NYSE:CRM) on Tuesday and GameStop (NYSE:GME) on Wednesday.
Thursday is set to be the busiest day for earnings, with notable companies like Ulta Beauty (NASDAQ:ULTA), Hewlett Packard Enterprise (NYSE:HPE), CleanSpark (NASDAQ:CLSK), Lululemon Athletica (NASDAQ:LULU), and DocuSign (NASDAQ:DOCU), among others, scheduled to release their results.
What analysts are saying about US stocks
Yardeni Research: “There was an odd divergence of stock market sentiment indicators this past week. The Investors Intelligence Bull/Bear Ratio jumped to 3.46, well above its average over time. The AAII Bull/Bear Ratio fell below its average over time. So sentiment is mixed. It is likely to get more bullish if the year-end rally persists, as we expect. That might set up the market for a sharp pullback at the start of 2025.”
“For now, we are still targeting 6100 on the S&P 500 by the end of this year. We've been forecasting 20,000 on the Nasdaq by mid-2025. It may get there well ahead of schedule.”
Evercore ISI: “The longer term Roadmap for 2025 is informed by the price action since the 2024 Election – a microcosm of Trump’s First Term, Second Year, 2018, pairing Tariff policy and Immigration issues with Deregulation and Tax Reform.
Whether 2025 also includes a selloff as was seen in late 2018 will depend on traditional signs of a market top appearing. Oncoming Recession, inflation/burst of a Bubble, or an Uncooperative Fed/Agitated “Bond Vigilantes” responding to signs of a Recession/Bubble are among them. Valuation extremes alone do not end Bull Markets. Currently, few if any signs of a Recession or Bubble exist, the Fed is set to continue cutting rates and the “Bond Vigilantes” have gone “Home for the Holidays”.”
Wedbush: “We expect tech stocks to be strong to end the year with a Santa rally as the Street further digests a less regulatory spider web under Trump with Khan/FTC days in the rearview mirror, stronger AI initiatives within the Beltway on the way, and a goldilocks foundation for Big Tech and Tesla (NASDAQ:TSLA) looking into 2025 and beyond. We believe tech stocks will be up another 20%+ in 2025 on the shoulders of the AI Revolution and a $1 trillion+ of incremental AI cap-ex over the next 3 years.”
Bank of America (NYSE:BAC): “Although equity sentiment and valuation are currently elevated, we still see ample reason to stick with stocks over bonds for the long-term. For the equal- weighted S&P 500, valuation points to healthy price returns of 5-6% per year over the next decade (and more with dividends).
UBS: “The holiday season is in full swing and spirits seem bright, at least among investors. They should be after a year-to-date 28% total return to the S&P 500. If anything, it’s raising concern about the markets getting frothy, a claim backed up by the latest Conference Board consumer survey showing confidence that stock prices will increase is at a 37-year high. Signs of actual froth are most evident in crypto prices, long positions in S&P 500 futures, and trading volumes in leveraged ETFs. But the exuberance synonymous with frothy financial markets is not yet widespread based on multiple factors. That’s unlikely to change in the next few months, though exuberance could really start to rise by this time next year.”