Stock Market News: Dow Climbs
Stocks roared higher again on Friday to climb out of this week’s early hole with some gains thanks to a “just right” jobs report.
The Dow Jones Industrial Average gained 450 points, or 1.2%. The S&P 500 jumped 1.3%. The Nasdaq Composite inched 2% higher.
The 2-year Treasury yield fell to 4.804% this week while the 10-year yield was down to 4.498%. The 10-year yield marked its largest one-week decline since mid-December, according to Dow Jones Market Data and snapped a four-week streak of rising yields.
The April employment report from the Labor Department came in cooler than expected, unemployment ticked up, and wage growth moderated. It was the kind of report that market observers love to call a “Goldilocks” release because it wasn’t too cool or too hot.
“The demand for labor is slowing which will eventually ease inflation pressures, giving the Fed some leeway to cut rates later this year,” writes Jeffrey Roach, Chief Economist at LPL Financial. “Slower payroll growth and fewer hours worked imply the economy is slowing at a measured pace. This jobs report is consistent with the soft landing narrative.”
Odds of at least one rate cut through September were back up to 68.3% from 61.6% on Thursday, according to the CME FedWatch Tool. Odds of at least 75 basis points in cuts through the end of the year were up to 24.9% from 17.4% on Thursday.
Though the jobs report was an encouraging sign, it will take more substantial signs of progress toward the Federal Reserve’s 2% inflation target before any such cuts become a reality.