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Stocks rose on Friday after a light jobs report in April gave investors hope of a rate cut sooner or later.
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Expectations have been revised upwards in recent weeks following a series of promising economic data.
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The U.S. economy added 175,000 jobs last month, below expectations of 238,000.
U.S. stocks rose on Friday after a soft jobs report in April sent bond yields plunging and raised the chances of a Federal Reserve rate cut later this year.
The U.S. economy added 175,000 jobs in April, well below economists’ forecast of 238,000 jobs and well below the 303,000 added in March. Meanwhile, the unemployment rate rose from 3.8% to 3.9%.
The Light Jobs Report should give the Fed more flexibility in accelerating the timing of rate cuts, and with that sentiment in mind, bond yields fell significantly. The 10-year Treasury note fell 10 basis points to 4.48%.
Investors have been closely watching the economic data – and the Fed’s response to them – looking for signs of a time when the central bank will cut rates. In recent weeks, expectations for cuts have been revised upwards as the figures have become popular. The market is in a situation where negative economic news is positive for risky assets like stocks.
“The April jobs report was exactly what the market wanted,” Russell Price, chief economist at Ameriprise, wrote in a client note. “Job growth was solid and well distributed, but the pace slowed significantly compared to the surprisingly strong gains in the first quarter.”
Friday’s jobs report was the “first material ‘downside surprise’ in more than two years,” George Mateyo, Key Wealth’s chief investment officer, added in a commentary to Business Insider. “Still, the weakness wasn’t so weak as to indicate the labor market is turning. It was a slowdown that the Fed and many market participants have been wanting for some time.”
Also helping to boost shares Friday was Apple, which rose about 7% after reporting a better-than-feared second-quarter earnings report. The iPhone maker also launched a historic $110 billion stock buyback program and increased its quarterly dividend by 4%, which was cheered by investors.
Here were the American indexes at 10:30 am on Friday:
Here’s what else happened on Friday:
In commodities, bonds and crypto:
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West Texas Intermediate crude fell 0.08% to $78.89 per barrel. Brent crude, the international benchmark, rose 0.11% to $83.76 per barrel.
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Gold rose 0.06% to $2,311.20 an ounce.
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The yield on ten-year government bonds fell by 10 basis points to 4.48%.
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Bitcoin rose 3.49% to $61,148.
Read the original article on Business Insider
