What’s driving markets

The implications of the Fed’s decision Wednesday to begin scaling back its bond purchase program were still being discussed by analysts Thursday. The central bank said it would start reducing purchases by $15 billion per month, after what it called substantial further progress on inflation and labor market goals.

See: Some puzzles left behind after Fed Chair Powell’s press conference

“Broadly our view on interest rate policy is that the Fed will remain patient, leaving nine months between the end of QE and any increase in rates, with our expectation of the first hike being Q1 2023. However, we would acknowledge that the risks are skewed to an earlier move,” said Ryan Djajasaputra, an economist in London for Investec.

Read: Why the Fed’s long-awaited taper announcement isn’t rattling the stock market

The focus is shifting to the U.S. employment report for October due for release from the Labor Department on Friday, as Fed Chair Jerome Powell linked the possibility of starting the interest rate-hike cycle to a jobs-market recovery. The Labor Department on Thursday said jobless benefit claims dropped by 14,000 to 269,000 in the seven days ended Oct. 30, a new pandemic low.

It may take some big surprises, however, for jobs reports to move the needle on Fed expectations, said Matt Weller, global head of research at Forex.com and City Index, in a note.

“The next several jobs reports are unlikely to influence monetary policy meaningfully unless they’re dramatically better or worse than expected for a sustained period,” he wrote. “That said, there may still be implications for fiscal policy as a major stimulus program winds its way through Congress as fears of inflation rise for the first time in decades.”

Unit-labor costs jumped 8.3% in the period from July through September, the government said Thursday. The rising costs as productivity plunged, with companies struggling to secure enough supplies on time to keep production going at full tilt.

Meanwhile, the Bank of England defied expectations for a rate increase, standing pat in its Thursday meeting.

Which companies are in focus?

Shares of Qualcomm Inc.
QCOM,
+12.25%
jumped after the mobile-chip maker reported profit and sales late Wednesday that jumped to records and predicted more growth to come.

Moderna Inc.
MRNA,
-19.03%
shares dropped after the company missed on sales of its COVID-19 vaccine in the third quarter of this year.

Shares of ViacomCBS
VIAC,
-4.45%
gave back early gains after the media and entertainment company reported third-quarter profit that matched expectations and revenue that beat, amid strength in its streaming and TV entertainment businesses.

Roku Inc.
ROKU,
-7.66%
reported strong profit growth for the third quarter late Wednesday but shares of the connected-television company fell after the company forecast a weaker-than-expected holiday quarter due to the impacts of supply-chain disruptions.

Shares of MGM Resorts International Inc.
MGM,
-2.90%
fell after the casino operator reported a surprise third-quarter profit and said it would sell its operations of The Mirage.

Nvidia Corp.
NVDA,
+12.42%
shares surged on growing speculation that the company will benefit from the Metaverse fad gripping big tech. The move put Nvidia’s market cap above $700 billion for the first time, according to Dow Jones Market Data.

What are other markets doing?

The yield on the 10-year Treasury note
TMUBMUSD10Y,
1.519%
fell 8.1 basis points to 1.526%. Yields and debt prices move in opposite directions.

The ICE U.S. Dollar Index
DXY,
+0.50%,
a measure of the currency against a basket of six major rivals, rose 0.5%.

Oil futures reversed course, with the U.S. benchmark
CL00,
-2.40%
falling 2.5% at $78.86 a barrel. Gold futures
GC00,
+1.68%
were up 1.7% at $1,793 an ounce.

The Stoxx Europe 600
SXXP,
+0.41%
rose 0.4%, while London’s FTSE 100
UKX,
+0.43%
gained 0.5%.

The Shanghai Composite
SHCOMP,
+0.81%
rose 0.8%, while the Hang Seng Index
HSI,
+0.80%
advanced 0.8% in Hong Kong and Japan’s Nikkei 225
NIK,
+0.93%
rose 0.9%.