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Stocks were choppy Tuesday as market participants considered what the delayed November jobs report could mean for the Federal Reserve and interest rates in 2026. A higher-than-expected payroll number couldn’t offset concerns over a rising unemployment rate, though, with two of the three main indexes extending their recent losing streaks.
Ahead of the open, the Bureau of Labor Statistics (BLS) said nonfarm payrolls rose by 64,000 in November, beating economists’ estimate for 45,000 new jobs. The report also showed 105,000 job losses for October, while figures for August and September were revised down by a combined 33,000.
More concerning was the unemployment rate, which rose to 4.6% in November from 4.4% in September – its highest level in more than four years.
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“This report bolsters the way we have been thinking about the Fed’s current policy approach,” says Elyse Ausenbaugh, head of investment strategy at J.P. Morgan Wealth Management. “The delivery of ‘insurance’ cuts over the past few months was prudent and brought rates to a more neutral level. One additional cut may be appropriate in the first quarter of 2026, but the economy looks stable enough to heed patience in taking additional action.”
Indeed, the report did little to move the needle on rate-cut expectations. According to CME Group FedWatch, futures traders are pricing in a 76% chance the Fed will keep the federal funds rate unchanged in January. Odds are at 43% that its first rate cut of 2026 will come in March.
These rate-cut odds could shift with Thursday morning’s release of the November Consumer Price Index (CPI) report, though the data are likely to be distorted due to the government shutdown.
At the close, the Dow Jones Industrial Average was down 0.6% at 48,114 and the S&P 500 was off 0.2% at 6,800 – their third straight drop. The Nasdaq Composite managed to gain 0.2% to end at 23,111.
Oil prices head toward their worst annual loss since 2018
It wasn’t just equities that struggled on Tuesday. Wall Street was also watching the energy market as crude oil prices slumped 2.7% to $55.27 per barrel, their lowest settlement since February 2021.
U.S. crude oil prices are down 23% for the year to date so far – the worst showing since 2018 – amid increased production output from OPEC and signs that a Russia-Ukraine peace deal could come sooner rather than later.
Today’s slide weighed on several energy stocks, including Chevron (CVX, -2.0%), Exxon Mobil (XOM, -2.6%) and Phillips 66 (PSX, -6.9%).
Pfizer sinks on weak guidance
Energy was by far the worst-performing of the 11 S&P 500 sectors today, with health care a distant second.
Pfizer (PFE) was one of the most buzzworthy health care stocks today, sinking 3.4% after the drugmaker said it expects 2026 earnings per share of $2.80 to $3.00, below the $3.05 per share analysts are calling for.
PFE also forecast full-year revenue of $59.5 billion to $62.5 billion, which, at the midpoint, falls short of analysts’ estimate for revenue of $61.5 billion.
On Monday, BofA Securities analyst Jason Gerberry reiterated a Neutral (Hold) rating on PFE and lowered his price target to $28 from $29.
Gerberry says he struggles to see a “re-rating catalyst” as Pfizer works through its multi-year loss of exclusion period, which is expected to end in 2029. However, he notes that this is offset by the drug stock’s attractive valuation and solid 6.5% dividend yield.
Rallying Roku gets a double upgrade
Elsewhere, Roku (ROKU) was up nearly 4% at its intraday high before ending with a 1.9% gain. Morgan Stanley analyst Thomas Yeh double upgraded the streaming giant to Overweight from Underweight (the equivalents of Buy and Sell, respectively).
Yeh also lifted his price target on the communication services stock to $135 from $85, representing implied upside of 21% to current levels.
While the analyst’s Underweight rating was based on worries over “rising competition in ad-supported streaming,” he now anticipates “multiple tailwinds” to support revenue growth in 2026, including increased ad spending and an expanding user base.
Roku had a rough start to 2025 but has been red-hot since bottoming off its early April lows. Shares are now up nearly 48% for the year to date, outpacing the S&P 500 by more than 32 percentage points.