Wall Street’s main stock indexes rose on Friday after stronger-than-expected March jobs data pointed to resilience in the labor market even as it meant the Federal Reserve would be in no rush to cut interest rates.
A Labor Department report showed nonfarm payrolls increased by 303,000 jobs in March compared with expectations for an increase of 200,000, as per economists polled by Reuters.
The unemployment rate stood at 3.8% compared with expectations that it would remain steady at 3.9%, while average wages earned rose 0.3% on a monthly basis, in line with estimates.
“The meaningful data point … is average hourly earnings, which have now fallen down to 4.1% year over year, which is the lowest level since June of 2021,” said David Waddell, CEO and chief investment strategist at Waddell & Associates.
“So the employment report was hot, but it was a cooling inflation report and that’s why the market can digest it .. this doesn’t really change anything.”
Money markets are now pricing in about 56% chance of at least a 25 basis point rate cut from the central bank in June, down from about 60% prior to the data release, according to the CME FedWatch tool.
However, yields on U.S. Treasury notes advanced after the data, with the yield on the ten-year note last at 4.3655%.
The Friday report followed a broader market selloff in the previous session, when all three major stock indexes fell more than 1% after hawkish comments from Fed officials.
Minneapolis Fed Bank President Neel Kashkari said on Thursday while he had penciled in two rate cuts for this year at the U.S. central bank’s meeting last month, none may be required if inflation continues to elude the Fed’s target.
Investors will be now looking for more clues on the monetary policy in comments from Fed Governor Michelle Bowman and Dallas Fed President Lorie Logan, scheduled to speak during the day.
A slew of mixed economic data during the week, such as the soft services activity report, the stronger manufacturing report and comments from policymakers have pressured equities, with all three indexes heading for weekly losses.
At 9:39 a.m. ET, the Dow Jones Industrial Average was up 51.48 points, or 0.13%, at 38,648.46, the S&P 500 was up 14.55 points, or 0.28%, at 5,161.76, and the Nasdaq Composite was up 41.12 points, or 0.26%, at 16,090.20.
Ten of the 11 major S&P 500 sectors were trading higher, with consumer discretionary leading gains, up 0.4%.
Most megacap growth stocks also advanced in early trading, with Nvidia, Meta Platforms and Amazon.com up between 0.9% and 1.4%.
Krispy Kreme gained 8.5% after Piper Sandler upgraded the doughnut chain to “overweight” from “neutral”.
Shockwave Medical gained 1.7% after Johnson & Johnson agreed to buy the medical device maker for $12.5 billion.
Declining issues outnumbered advancers for a 1.18-to-1 ratio on the NYSE and for a 1.43-to-1 ratio on the Nasdaq.
The S&P index recorded seven new 52-week highs and five new lows, while the Nasdaq recorded 20 new highs and 61 new lows.
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