On Friday, U.S. stocks concluded the trading day with gains, bolstered by a robust jobs report that highlighted the ongoing strength of the economy, while also raising speculation about the possibility of a postponement in Federal Reserve interest rate reductions.
Across the board, all major sectors of the S&P 500 posted advances, with particular strength seen in communication services, industrials, and technology.
According to data released by the U.S. Labor Department, March witnessed a notable surge in hiring by employers, surpassing expectations. Moreover, wages continued to rise steadily, indicating a firm footing for the economy as it closed out the first quarter of the year.
Tom Plumb, serving as president and portfolio manager at Plumb Funds located in Madison, Wisconsin, commented on the implications of the labor market data. He noted that the robust economic performance seen in the report reduces the immediate necessity for Federal Reserve interest rate cuts. Plumb highlighted that despite market expectations regarding the timing of such rate adjustments, the diminishing likelihood of a recession is of greater significance.
“The current robust economic conditions are proving to be non-inflationary,” stated Plumb. This latest labor report further reinforces the belief that the risks of a recession are diminishing, which carries more weight than mere speculation about the timing of potential interest rate adjustments.
On Friday, the Dow Jones Industrial Average surged by 307.06 points, or 0.80%, reaching 38,904.04, while the S&P 500 climbed 57.13 points, or 1.11%, closing at 5,204.34. Similarly, the Nasdaq Composite experienced a notable gain of 199.44 points, or 1.24%, ending the day at 16,248.52.
Despite the day’s gains, indexes closed the week with declines, influenced by mixed economic data. While a stronger manufacturing report provided some optimism, it was countered by a softer services activity report.
For the week, the Dow fell by 2.3%, the S&P 500 dropped 1%, and the Nasdaq declined 0.8%. Market sentiment regarding interest rates also shifted, with money markets now pricing in approximately two rate cuts for the year, down from the previously expected three.
Tesla, however, deviated from the market trend on Friday, with its shares sliding by 3.6% following reports that the company had canceled plans for a lower-priced vehicle, impacting its potential growth prospects in the mass-market segment.
On the positive side, Krispy Kreme saw a 7.3% increase in its shares after being upgraded to “overweight” from “neutral” by analysts at Piper Sandler. Additionally, Shockwave Medical experienced a 2% gain after Johnson & Johnson announced its acquisition of the medical device maker for $12.5 billion.
Trading volume on U.S. exchanges stood at 10.11 billion shares, below the 11.76 billion average for a full session over the last 20 trading days. Advancing issues outnumbered declining ones on the NYSE with a ratio of 1.44-to-1, while on Nasdaq, advancers had a slight advantage with a ratio of 1.13-to-1.
The S&P 500 posted 20 new 52-week highs and 5 new lows, while the Nasdaq Composite recorded 67 new highs and 136 new lows.
Sources: moneycontrol.com