Scott Olson
Major market averages rallied higher and finished in the green on Friday after faltering early on as Wall Street received the latest round of payrolls figures.
For the session, the Nasdaq Composite (COMP.IND) closed higher by 1.6%, the S&P 500 (SP500) advanced by 1.1%, and the Dow (DJI) finished on top by 0.8%.
For the week, the Nasdaq ended up on top by 1.6%, and the S&P 500 picked up 0.4%, while the Dow finished lower by 0.3%.
Furthermore, 10 of the 11 S&P 500 sectors were able to conclude trading higher on Friday with Info Tech and Communications leading the way. The only segment to end the session in the red was the Consumer Staples sector.
U.S. Treasury yields shot higher early on but tapered back a bit as the day progressed. The 10-year Treasury yield (US10Y) rose 7 basis points to 4.79% and the 2-year yield (US2Y) rose 6 basis points to 5.08%.
See how yields traded across the curve.
The September jobs report surged past consensus in September as data showed U.S. nonfarm payrolls of +336K versus the expected +160K figure. The unemployment rate came in at +3.8% versus the expected 3.7% level.
The strong jobs data also lent support early on to the U.S. Dollar Index (DXY) but it since reversed course as it ended lower by 0.2%.
“You can overanalyze the payrolls print if you wish; you can look to the signal from the Wall Street Journal Wednesday, or you can blame ‘the 0DTE crowd’ if this took you by surprise. Or you could note that each of the indices has reversed according to standard technical patterns, which to our eyes means the selloff since the July highs has been simply a correction. As we have said continuously since late 2022, we remain bullish and continue to look to new all time highs in each index,” Cestrian Capital Research stated.
Regarding the hot payrolls report, Mohamed El-Erian stated: “Given how often the #FederalReserve has stressed that it is ‘data dependent,’ this will put a hike back on the table for markets on November 1.”
“Today’s report drove yet another increase in Treasury yields and fanned the flames that the FOMC may hike the federal funds rate one more time at one of its two remaining meetings of the year,” Wells Fargo outlined. “Another rate hike before the end of the year is a possibility, but for now our base case remains that the last rate hike of the tightening cycle occurred in July.”
