US stocks advanced, while two-year Treasury yields declined, after jobs data that showed some signs of easing in a still-tight American labor market. The dollar fell.
(Bloomberg) — US stocks advanced, while two-year Treasury yields declined, after jobs data that showed some signs of easing in a still-tight American labor market.
The dollar fell.
The S&P 500 rose as much as 1.3% and the two-year yield pushed below 3.5% after employers added 315,000 jobs last month, slightly above what economists expected. Wage growth slowed as more Americans entered the labor force, potentially signaling some softening in labor demand.
The jobs report prompted some traders in the rates market to slightly alter their views on the Federal Reserve’s next policy move. While markets are still pricing in the likelihood of a three-quarters of a percentage point interest-rate hike this month, they trimmed their bets after the report.
The labor-market data add to a bevy of reports this week that validate the Fed’s assertion that the economy is robust enough to withstand more tightening.
Risk assets have been under pressure since Chair Jerome Powell made clear the central bank will raise rates further and keep them elevated until price gains slow.
”Today’s jobs report was a step in the right direction, in that the pace of job and wage growth stabilized,” wrote Matt Peron, director of research at Janus Henderson Investors.
“This should allay some of the worst fears that have taken hold in equity markets of late. However, we reiterate our caution that we are not out of the woods just yet, as stubbornly high wage gains could keep the Fed on an aggressive path.
Stay invested but defensive.”
Read More: Everything Working ‘Way It Should’: Wall Street Reacts on Jobs
Concern that rising rates will hurt growth has already weighed on markets, pushing global bonds into their first bear market in a generation.
The Bloomberg Global Aggregate Total Return Index of government and investment-grade corporate bonds down more than 20% from a 2021 peak.
Oil trimmed gains after news that the Group of Seven most industrialized countries agreed to introduce a price cap for global purchases of Russian oil, while Russia looks set to resume gas supplies through its key pipeline.
Meanwhile, zinc headed for its biggest weekly loss in over a decade on concern Chinese demand will be hamstrung by new virus restrictions.
Gold and Bitcoin rose.
Some of the main moves in markets:
Stocks
- The S&P 500 rose 1.1% as of 11:32 a.m. New York time
- The Nasdaq 100 rose 1%
- The Dow Jones Industrial Average rose 1.1%
- The Stoxx Europe 600 rose 2%
- The MSCI World index fell 0.8%
Currencies
- The Bloomberg Dollar Spot Index fell 0.5%
- The euro rose 0.8% to $1.0029
- The British pound rose 0.3% to $1.1576
- The Japanese yen was little changed at 140.09 per dollar
Bonds
- The yield on 10-year Treasuries declined three basis points to 3.22%
- Germany’s 10-year yield declined four basis points to 1.53%
- Britain’s 10-year yield advanced four basis points to 2.92%
Commodities
- West Texas Intermediate crude rose 2% to $88.30 a barrel
- Gold futures rose 1% to $1,726.40 an ounce
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