Wall Street and the crypto market experienced a strong rally following the Democratsโ congressional victory. However, CNBCโs Jim Cramer believes the upcoming US employment report could put those gains at risk.
According to BeInCrypto, Cramer warned that Fridayโs October jobs data could become the next major market catalyst, potentially shifting expectations for Federal Reserve interest rates.
๐ Wall Streetโs Powerful Rally
US equities recorded significant gains:
๐น Dow Jones: +3.03% to 53,356.12
๐น S&P 500: +1.58% to 7,688.62
๐น Nasdaq Composite: +1.44% to 25,736.51
The rally reportedly added approximately $1.2 trillion to the US stock marketโs total value. Meanwhile, the overall crypto market capitalization climbed nearly 2%, with all 10 leading cryptocurrencies trading higher.
๐ป AI Stocks Move in Different Directions
The market reaction was not uniform across the technology sector.
Microsoft surged 6.70%, Amazon gained 6.58%, and Apple advanced 5.54%, reaching a new record.
Meanwhile, Nvidia fell 2.76%, while AMD, CoreWeave, Nebius, and Iren also faced selling pressure.
Investors are weighing whether political opposition to data center expansion could slow AI infrastructure investment and affect companies dependent on that spending.
๐ฆ The Federal Reserve Remains in Focus
Cramer argued that election results do not fundamentally change the underlying business cycle.
JPMorgan strategist Michael Cembalest shares a similar view, emphasizing that interest rates, Fed policy, corporate earnings, and AI-related borrowing remain the major drivers of financial markets.
The Federal Reserve previously maintained its benchmark rate at 3.75%โ4.00%, with two officials voting in favor of an increase.
According to CME FedWatch, the probability of a December rate hike remained elevated at 82%, compared with 77.4% a day earlier.
๐ Fridayโs Jobs Report Could Change Everything
Economists surveyed by Reuters expect October payrolls to increase by 65,000, compared with Septemberโs 29,000. The unemployment rate is forecast to remain at 4.2%.
Early employment indicators have shown stronger numbers:
โข ADP reported 86,000 private-sector jobs, exceeding expectations of 75,000.
โข Vanguard estimates that October employment growth could reach 120,000.
However, ADPโs figures have historically been an unreliable predictor of the governmentโs official employment report.
๐ What Could Happen Next?
A stronger-than-expected jobs report could increase expectations of a Fed rate hike, push Treasury yields higher, and put pressure on technology stocks and cryptocurrencies.
Conversely, weaker employment data could reduce rate-hike expectations and potentially support another leg higher in risk assets.
Cramer cautioned that Wednesdayโs rally was heavily influenced by the election outcome, but Fridayโs economic data could quickly shift investor sentiment.
The key question now: Will the October jobs report extend the rally or trigger a major reversal?
#BTCRebounds80K #USMidterms-WhatAreMarketsExpecting?
