Nasdaq Ends Higher as Rate-Cut Bets Grow Despite Broader Market Weakness

BY COMFORT OGBONNA

U.S. stocks closed mixed on Tuesday, with the Nasdaq finishing higher while the S&P 500 and the Dow Jones Industrial Average slipped, weighed down by notable losses in healthcare and energy shares. Investors digested delayed economic data releases, using them to reassess expectations for Federal Reserve monetary policy heading into next year amid lingering uncertainty over growth and inflation.

The Labor Department reported that nonfarm payrolls rose by 64,000 jobs in November, rebounding modestly after a decline in October that followed cuts in government spending. Despite the job gains, the unemployment rate climbed to 4.6% in November, underscoring a cooling labor market as businesses and consumers navigate economic headwinds linked to President Donald Trump’s aggressive trade stance and its potential impact on global demand.

Additional data released on Tuesday showed U.S. retail sales were flat in October, falling slightly short of expectations for a modest increase. Market participants cautioned that the figures may not fully reflect underlying consumer trends, as data collection has been slowed by disruptions tied to a recent government shutdown. As a result, investors appeared reluctant to draw firm conclusions from the numbers.

Market strategists said the latest batch of data is unlikely to meaningfully shift the Federal Reserve’s near-term thinking. Mark Hackett, chief market strategist at Nationwide, noted that most economic indicators are now being interpreted almost exclusively through the lens of what they might mean for interest rates. He added that the data released on Tuesday largely reflects conditions from several weeks ago and is therefore unlikely to alter the broader policy outlook.

Even so, traders are increasingly convinced that rate cuts are coming. Following the data, futures markets showed investors pricing in at least 58 basis points of interest rate cuts next year, more than double the 25 basis points signaled by the Fed at its meeting last week. The growing divergence between market expectations and official guidance highlights uncertainty about how quickly economic momentum may fade.

Adding to the focus on the central bank, President Trump is scheduled to interview Federal Reserve Governor Christopher Waller on Wednesday as part of the process to select the next Fed chair, according to media reports. The development kept investors attentive to any signals that could influence the future direction of monetary policy.

At the close, the Dow Jones Industrial Average fell 302.30 points, or 0.62%, to 48,114.26. The S&P 500 lost 16.25 points, or 0.24%, ending at 6,800.26. In contrast, the Nasdaq Composite gained 54.05 points, or 0.23%, to finish at 23,111.46, supported by selective buying in technology-related shares.

Sector performance was broadly negative, with eight of the 11 major S&P 500 sectors ending the session lower. Energy stocks led the declines, sliding nearly 3% as crude oil prices dropped to their lowest level since 2021, renewing concerns about oversupply and weakening demand. Healthcare stocks also came under pressure, falling 1.28% overall. Pfizer shares dropped 3.4% after the company warned that 2026 could be challenging due to declining sales of COVID-19 products and tighter margins, while Humana plunged 6% following the announcement of unspecified leadership changes.

Elsewhere in the market, B. Riley shares surged 53.8% after the investment bank reported a second-quarter profit, reversing a loss from the same period a year earlier in a long-delayed earnings filing. Comcast rose 5.4% after speculation from a prominent financial journalist about possible involvement by an activist investor sparked buying interest.

In separate corporate news, Nasdaq submitted paperwork to the U.S. Securities and Exchange Commission seeking approval to introduce round-the-clock stock trading, following similar moves announced earlier by the New York Stock Exchange and Cboe Global Markets. The proposal reflects growing competition among exchanges to cater to global investors seeking extended access to U.S. markets.

Market breadth remained negative. On the New York Stock Exchange, declining stocks outnumbered advancers by a ratio of 1.63 to 1, with 127 new highs and 88 new lows recorded. On the Nasdaq, 2,064 stocks advanced while 2,596 declined, resulting in a 1.26-to-1 ratio favoring decliners. The S&P 500 logged 14 new 52-week highs and five new lows, while the Nasdaq Composite posted 86 new highs and 196 new lows.

Trading volume across U.S. exchanges totaled 16.70 billion shares, slightly below the 20-day average of 16.99 billion, suggesting investors remain cautious as they await clearer signals on economic conditions and the Federal Reserve’s next moves.