At the same time, investors remain on edge about the path forward for interest rates. They are still awaiting key inflation data that had been delayed during the US government shutdown, which could inform the Federal Reserve’s pace of cuts into next year.
The S&P 500 index is more than 4% lower so far in November, putting it on track for its worst month since March.
Investors, Mr Stanley said, are “squaring up” as they grapple with uncertainty about the state of the economy, and whether the Fed will be forced to keep interest rates higher if inflation heats up.
“There’s a lot of trepidation about where inflation is,” he said. “There’s a lot of opacity.”
Thursday’s jobs report did little to offer clarity on the Fed’s upcoming decisions about interest rates, said Eric Teal, chief investment officer at Comerica Bank.
While employers added 119,000 jobs in September – more than double what many analysts had expected – the unemployment rate ticked up from 4.3% to 4.4%, the Labor Department figures showed. The mixed data, analysts said, leaves more questions than answers about whether the Fed will cut at their next meeting in December, and into 2026.
Mr Teal pointed to continued AI adoption and lower interest rates as two key aspects of the economic backdrop that need to remain intact in order to keep propelling stocks to new highs.
Growing jitters about an AI bubble and inflation could inject even more volatility into financial markets beyond this month, he added.
“When you have a market that’s priced at perfection, you need all of the external catalysts behind it to keep driving it higher,” Mr Teal said.
“A lot of those things, over the past three weeks, have been called into question.”