Wall Street staged an impressive comeback on Friday, recovering from earlier losses after an unexpectedly robust US jobs report elevated expectations of an impending interest rate hike by the Federal Reserve.
The Dow Jones Industrial Average (^DJI) surged nearly 1%, or approximately 300 points, marking a strong rebound for all major stock indices which had previously languished in negative territory. The S&P 500 (^GSPC) mirrored this rise, advancing by 1%, while the technology-heavy Nasdaq Composite (^IXIC) notched an approximate 1.3% gain.
Contrary to projections, the September employment figures displayed no signs of a cooling labor market, with the U.S. economy adding an impressive 336,000 jobs, nearly twice the anticipated number. This unexpected surge may bolster the Fed’s conviction in the market’s resilience, potentially advocating for a prolonged period of tighter monetary policy.
The data unveiled on Friday represents the final pivotal payrolls report ahead of the central bank’s upcoming policy meeting.
Market experts are closely monitoring the bond market, particularly after remarks from Fed official Mary Daly on Thursday. Daly suggested that if long-term bond yields remain at their current levels, there might not be an immediate need for further interest rate hikes. Following the release of the jobs report, there was a renewed upswing in 10-year U.S. Treasury yields (^TNX), breaching the 4.8% mark.
Some analysts posit that the bond sell-off could continue unabated, lacking any discernible impetus to halt the trend. They contend that a substantial downturn in equities or signs of economic softening would likely be required to prompt a retreat in yields.
Fears surrounding economic growth have put downward pressure on oil prices, culminating in what is poised to be the most significant weekly loss since March, due to an uncertain demand outlook. West Texas Intermediate (WTI) crude oil futures (CL=F) fluctuated around $83 per barrel on Friday, while Brent crude futures (BZ=F) managed to maintain their grip on the crucial $84 level.
In conclusion, the trajectory of Wall Street following the robust jobs report underscores the market’s sensitivity to economic data and the looming specter of potential Federal Reserve actions. As investors brace for potential shifts in monetary policy, the markets remain poised for further volatility in the days ahead.
Source: Yahoo Finance
