The latest data released by the United States showed that the US Markit Manufacturing PMI in November unexpectedly fell into the contraction zone. After the data was released, the US dollar index accelerated its decline and hit a daily low of 103.36. The three major US stock indexes rose and fell, and cryptocurrencies rose sharply, with Bitcoin breaking through the $38,000 mark at one point.

Stock market: US stocks mixed

U.S. stocks were mixed on Friday, with the Dow Jones Industrial Average up 100 points and the Nasdaq Composite down in thin trading in a shortened post-Thanksgiving session.

The S&P 500 fell less than 0.1%, the Dow Jones Industrial Average rose 109 points, or 0.3%, and the Nasdaq Composite fell 0.3%.

Trading will be shortened on Friday as investors recover from Thursday's Thanksgiving holiday. Major U.S. stock exchanges such as the New York Stock Exchange and Nasdaq will close early at 1 p.m. ET.

Bond markets were also expected to trade in a shorter session as a sell-off in European bonds stoked concerns about higher interest rates and Germany’s borrowing woes. Against that backdrop, bond yields broadly rose.

The 10-year U.S. Treasury yield rose 7 basis points to 4.482%.

Volume is traditionally lower this week, which could make markets more volatile. Still, the major U.S. indexes are on track to gain about 1% across the board this week. That would be the S&P 500's fourth straight weekly gain, its longest winning streak since June, according to FactSet data.

Even though Nvidia's stock price fell after it beat earnings expectations earlier this week, which dampened some of the market's enthusiasm, November will still be the best month for the S&P 500 since July 2022. Since the beginning of the month, U.S. stocks have rebounded strongly after declines in August, September and October.

In fact, the market rebounded so quickly that some are wondering if stocks went from oversold to overbought in just three weeks.

“The rally since late October has been pretty phenomenal, recovering in a month’s time almost all the losses between early August and late October. Too far too fast?” David Morrison, senior market analyst at Trade Nation, said in emailed comments.

Preliminary data on the U.S. manufacturing and services sectors were released on Friday, the only reports of note in an otherwise dull economic data calendar.

The preliminary reading of the US Markit services PMI in November was 50.8, a four-month high; the preliminary reading of the US Markit manufacturing PMI in November fell 0.6 points to 49.4, a three-month low.

The survey also showed that employment at U.S. service providers and manufacturers fell in November for the first time since mid-2020 due to weak demand and rising costs.

The S&P Global Composite Employment Index slipped 1.6 points to 49.7, just below the expansion-contraction line. The organization's measure of overall business activity was unchanged in November, staying less than a point above the 50 mark for the fourth straight month.

Sian Jones, chief economist at S&P Global Market Intelligence, commented that companies cut jobs for the first time in nearly three and a half years in response to concerns about the outlook. Layoffs have spread beyond manufacturing, with service companies saying that employee headcount fell again in November as they sought to save costs. But on a more positive note, input price inflation slowed again, with the cost burden rising at the slowest pace in more than three years. The impact of higher oil prices on manufacturing appears to be fading, with the rate of cost inflation in manufacturing slowing significantly. Despite the slight increase, sales price inflation remains low relative to the average level of the past three years and is consistent with the Fed's 2% inflation target.

Next week will see the release of the Fed’s preferred inflation gauge, the October personal consumption expenditures (PCE) index, as well as other data.

As the holiday shopping season kicks off with Black Friday, retailers like Amazon, Walmart and Target will be in the spotlight. Some analysts expect the 2023 holiday shopping period to be similar to pre-pandemic years, meaning sales may not be as impressive as they were post-pandemic.

Foreign exchange market: The US dollar accelerated its decline, and major non-US currencies rose

The dollar slipped on Friday as investors bet U.S. interest rates have peaked, while the yen edged higher as a rise in Japan's core consumer price index reinforced views that the Bank of Japan may soon scale back monetary stimulus.

Currency markets remained in a tight range as U.S. markets were closed on Thursday for the Thanksgiving holiday and trading was shorter on Black Friday.

The dollar index, which measures the greenback against six major currencies, fell nearly 0.4% to a low of 103.36, close to a 2-1/2 month low of 103.17 hit earlier this week.

As the US dollar fell, major non-US currencies rose: GBP/USD stood above 1.26, the first time since September 5, up 0.53% on the day. USD/CAD fell to 1.36, the lowest since October 12, down 0.70% on the day. AUD/USD rose 0.50% on the day, reaching a high of 0.6591. NZD/USD rose about 0.6% on the day, reaching a high of 0.6087.

The dollar index, which measures the greenback against a basket of six major currencies, is down about 2.8% this month, which would be its biggest monthly drop in a year, as expectations grow that the Federal Reserve has ended its rate hikes and could start cutting them next year.

Markets have already lowered their expectations for a Fed rate cut in 2024, with futures now pricing in a 25% chance of a rate cut at the Fed’s March 2024 policy meeting, compared with a 33% chance last week, according to CME Group’s FedWatch tool.

Jefferies strategist Mohit Kumar said the Federal Reserve and the European Central Bank are likely to cut interest rates around June and September next year, while the Bank of England is likely to cut interest rates around May and August next year, possibly becoming the first central bank to do so.

“It will be difficult for the market to price in a rate cut earlier than June. We think bets on the first rate cut are in June to the third quarter of next year.”

Elsewhere, the yen was flat at 149.57 per dollar after data showed Japan's core consumer price index growth picked up slightly in October after slowing in the previous month. This reinforced investors' views that stubborn inflation could force the Bank of Japan to withdraw monetary stimulus before long.

The dollar has slowly recovered from a near 33-year low of 151.92 yen hit early last week and has gained 1.5% this month. Economists at ING said they expect the Bank of Japan to abandon its ultra-easy stance next year.

“Given that JGBs appear to have stabilized, we think the BOJ could remove its yield curve program as early as the first quarter of next year,” they said.

"If wage growth continues to accelerate next year, the Fed will begin its first rate hike in the second quarter of 2024."

The nation's core consumer price index, which excludes volatile fresh food prices, rose 2.9% in October from a year earlier, government data showed on Friday, below the 3.0% gain expected in a Reuters poll.

Japan's manufacturing activity shrank for a sixth straight month in November, a business survey showed on Friday, while modest growth in the services sector was little changed, highlighting the economy's fragility amid weak demand and rising inflation.

Cryptocurrency: Bitcoin breaks through $38,000, hitting new 2023 high

Cryptocurrency prices recovered from a sharp drop earlier in the week, with Bitcoin setting a new 2023 high on Friday.

Bitcoin rose 2% to $38,414.00 at one point, its highest level since May 2022. For the week, Bitcoin is on track to close up 5%.

Meanwhile, Ethereum has recovered above the key psychological level of $2,000, rising more than 2.5% to $2,133.00. The second-largest coin by market cap has outperformed Bitcoin this week, ending up with a gain of more than 9%.

Solana, which has been a standout performer this year, has lagged behind major coins this week, finishing the week largely flat. Solana is up more than 476% year to date, compared to Bitcoin’s 130% gain.

Investors are digesting the resignation of Changpeng Zhao (CZ), founder of Binance, the world’s largest exchange, after he agreed earlier this week to plead guilty to federal criminal charges filed by the U.S. Department of Justice. The move comes less than a month after FTX founder Sam Bankman-Fried was found guilty in a federal fraud and conspiracy trial.

Binance is the most important liquidity pool in crypto trading, and many believe that the exchange's settlement is a necessary development for the crypto industry to recover from FTX's 2022 debacle. With the investigation into Binance resolved, some believe it could even pave the way for the approval of a Bitcoin ETF, which many investors expect would be a major catalyst in driving Bitcoin to new highs.

Traders were also weighing minutes from the Federal Reserve’s most recent meeting, also released on the same day as the Binance turmoil, which showed officials had little appetite for any near-term rate cuts.

Binance's main rival Coinbase also hit a new 2023 high on Friday, with the latest trading price up 5.4% at $115.14, the first time it has reached that level since May 2022.

In other crypto stocks, Microstrategy, the largest public holder of bitcoin, rose 2.6%. Bitcoin mining companies also saw sharp gains, with the biggest gainers being Iris Energy and CleanSpark, which rose 10% and 11%, respectively.