MANHATTAN, NEW YORK – The Dow Jones Industrial Average surged past the 48,000-point threshold this week as investors reacted positively to the Federal Reserve’s interest rate cut. The market opened the week with minor losses but jumped sharply midweek, with the Dow rising roughly 600 points on Wednesday after the Fed reduced rates for the third and final time this year.
Despite a slight pullback on Friday, the Dow closed the week up 507 points, while the S&P 500 fell 43 points and the Nasdaq dropped 383 points. Market analysts say the combination of rate cuts, a new Fed chair anticipated next year, and strong earnings trends has positioned the stock market for continued gains into 2026. The Fed signaled it expects only one rate cut next year and another in 2027.
Economic data showed mixed signals for the labor market. Unemployment claims rose slightly to 236,000 for the week ending Dec. 6, while job openings in October climbed to 7.7 million, exceeding expectations. Layoffs also increased in October, according to the delayed JOLTS report. Economists noted that job openings remain high compared with last year, suggesting the labor market could strengthen in 2026.
Small business optimism improved slightly in November, according to a survey by the National Federation of Independent Business, rising just above the 52-year average of 98 points. However, uncertainty among small business owners also increased. A continued labor shortage was evident, with about a third of respondents unable to fill job openings. Inflation remains a concern, with 15% citing it as their primary challenge and 34% reporting higher selling prices, the highest since early 2023.