By Chuck Mikolajczak
NEW YORK (Reuters) – A gauge of global stock prices rose while U.S. Treasury yields fell on Friday after a softer-than-expected U.S. payrolls report, easing concerns the Federal Reserve would keep rates high for longer.
Nonfarm salaries rose by 175,000 last month, the lowest since October 2023, and remain below the 243,000 estimate from economists polled by Reuters.
The 3.9% annual change in average hourly earnings was the smallest since May 2021 and continued a steady decline toward the mid-3% range, which policymakers say is consistent with their 2% inflation target.
Recent data on inflation and the labor market had fueled fears that the Fed could be forced to keep rates high for longer than the market expected, or even raise rates again.
But at the end of Wednesday’s policy meeting, Fed Chairman Jerome Powell was expected to see the next rate cut as he saw an unlikely chance of a rate hike.
“The combination of how Powell characterized the committee’s position on rate hikes relative to the data they got and today’s jobs reports, which were good but not super worrisome, especially on the payroll side, makes for something we thought we accomplished . late last year,” said Scott Ladner, chief investment officer at Horizon Investments in Charlotte, North Carolina.
On Wall Street, US stocks rose, with each of the three major indexes up more than 1% and the Nasdaq leading the way with a jump of about 2%.
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Technology was the best performer of the 11 major S&P sectors, boosted by a roughly 5.97% jump in Apple (NASDAQ:) after the iPhone maker reported quarterly results and a record $110 billion stock buyback plan had announced.
Of the industry’s 397 companies that reported earnings through Friday morning, 76.8% beat analyst expectations, according to LSEG data, up from the 67% success rate since 1997 and the 79% in the past four quarters.
They rose by 450.02 points, or 1.18%, to 38,675.68; the S&P 500 gained 63.59 points, or 1.26%, to 5,127.79; and the achieved 315.37 points, or 1.99%, to 16,156.33.
This week, the S&P 500 rose 0.55%, the Nasdaq rose 1.43% and the Dow Jones rose 1.14%. The small cap index rose 1.56%
Treasury yields fell along with the dollar after payrolls reports, as investors raised expectations for a Fed rate cut in September this year, with markets pricing in a 66.8% chance of at least a 25% cut basis points (bps). up from 61.6% in the previous session, according to CME’s FedWatch Tool.
The yield on US 10-year benchmark bonds fell 6.1 basis points to 4.51% from 4.571% late on Thursday, while the yield, which typically moves in line with interest rate expectations, fell 6.5 basis points from 4.877% to 4.8119%.
The 10-year yield fell nearly 17 basis points this week, the biggest weekly drop since mid-December, while the 2-year rate fell about 19 basis points, the biggest weekly drop since early January.
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The MSCI index of shares around the world rose 8.67 points, or 1.14%, to 769.19 and was up 0.91% this week, on track for its second straight weekly gain.
In Europe, the index closed 0.46% higher, while the broad European index ended 8.84 points, or 0.44%, higher.
Against the Japanese yen, the dollar weakened 0.48% to 152.89, while sterling strengthened 0.1% to $1.2547. The dollar has fallen more than 3% against the yen this week, the largest weekly percentage decline since late November.
The yen continued its recovery from a 34-year low, capping a tumultuous week that included two suspected interventions by Japanese authorities.
Traders suspect authorities have intervened on at least two days this week and data from the Bank of Japan suggests Japanese officials have spent about $60 billion to defend the beleaguered yen, putting trading desks around the world on constant watch for further steps from the central bank. Bank.
In the commodities sector, oil prices fell and were on track for the biggest weekly loss in three months after the jobs report.
fell 1.06% to $78.11 per barrel to settle at $82.96 per barrel, down 0.85% on the day.
