NEW YORK (AP) — Stocks rose on Wall Street Friday and U.S. Treasury yields also rose after strong U.S. jobs data.
The S&P 500 rose 1.2%, paring some of this week’s losses and moving closer to its all-time high set last week. As of 1:29 p.m. ET, the Dow Jones Industrial Average was up 361 points (0.9%). The Nasdaq Composite rose 1.5%.
Technology companies led the rise. Semiconductor giant Nvidia rose 2.6%, and Google’s parent company Alphabet rose 1.8%. The gains were broad-based, with all sectors of the benchmark S&P 500 index rising, but the index remains on track for a weekly decline.
US Employer A shocking 303,000 workers were added to the payroll in March, according to a government report on Friday. A strong job market fueled growth in consumer spending and corporate profits, resulting in strong overall economic growth.
The strong job market has also raised concerns that inflation could gradually rise and the Federal Reserve could delay lowering interest rates. But Friday’s report showed wage growth was modest for the month at 0.3%, upward pressures on inflation have eased, and Wall Street still expects the Fed to start cutting interest rates in June.
Friday’s gains came after Federal Reserve officials spooked investors by questioning whether the central bank needed to cut interest rates this year amid a strong economy. This was followed by a decline. A series of recent reports indicate that the US economy remains resilient despite rising inflation levels and high interest rates.
US bond yields rose following the jobs report. The yield on the 10-year U.S. Treasury rose to 4.37% from 4.31% just before the report was released. The yield on the two-year Treasury note, which is driven largely by expectations for the Fed, rose to 4.71% from 4.65% just before the report.
While bond markets may be signaling concerns that interest rates will remain high for an extended period of time, stock markets are using strong employment figures as good news as consumer spending and corporate profits remain important to investors. seems to be accepted as such.
“Unless the market cuts rates one or two times and the Fed doesn’t keep them on hold, that’s good enough for equity investors,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance.
The Fed’s benchmark interest rate is at its highest level in 20 years, a result of historic interest rate hikes aimed at curbing inflation. The strategy appears to be working so far, with overall consumer prices falling significantly from their 2022 peak and inflation falling to 3.2% in February. By mid-2022, it will reach 9.1%.
Strong employment and consumer spending have raised concerns that it will become increasingly difficult to bring inflation down to the Fed’s target rate of 2%. It also increases the likelihood that inflation will reheat.
The Fed and investors will get another important update on inflation next week when the government releases its March consumer price report.
Wall Street is slightly ahead of expectations that the Fed will cut interest rates at its June meeting, according to CME’s FedWatch tool. That’s down from 65.9% on Thursday and 72% a month ago.
Other markets were mostly quiet as the latest corporate results were expected to pick up steam in the coming weeks.
Johnson & Johnson was largely unchanged after the pharmaceutical giant announced it would acquire medical technology company Shockwave in a deal worth about $13 billion.
Apple rose 0.8% after announcing: dismiss More than 600 people were hired in California, marking the first major wave of job cuts after the pandemic amid widespread consolidation in the technology industry. The tech industry has been cutting jobs for two years, but the measures have had little impact on the broader job market.
In the energy market, crude oil prices have risen by about 1% and demand has remained strong, so prices have risen by more than 20% since the beginning of this year.
European and Asian markets fell.
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AP Business writers Yuri Kageyama and Matt Ott contributed to this report.
