Wall Street stocks rise, US Treasury yields fall as jobs data brightens outlook

The non-farm payrolls report showed US employers added 253,000 new jobs in April, up from 165,000 in March and exceeding expectations for 180,000.

US Treasury yields rose after the report, while the dollar edged lower against a basket of major currencies.

Oil prices jumped on signs of economic strength but posted a third consecutive weekly decline. Shares of US banks also suffered some losses after a tough week following the collapse of a third major bank.

Since Fed Chair Jerome Powell indicated the central bank could hold off on hikes, traders are betting it will happen at the June meeting with calls for rate cuts in July, according to CME Group’s FedWatch tool. The chances of a cut in July have waned after Friday’s data.

But Friday’s trading nevertheless suggested a focus on signs of economic strength rather than the prospect of tighter policy, which are often stronger than expected.

“The stop button may have been hit and now it’s about the state of the US economy and what we saw today is in better shape,” said Christina Hooper, chief global market strategist at Invesco, New York. “The caveat is that a single data point does not paint the picture and, to a large extent, employment is a lagging indicator of the state of the economy.”

But even if good growth doesn’t lead to further tightening in the near term, Sameer Samana, senior global market strategist at Wells Fargo Investment Institute in Charlotte, North Carolina, disagrees with a “Goldilocks scenario” of markets where growth is without a hard recession. slows down and the Fed may ease policy quickly.

“If the Fed is cutting rates aggressively in the back half of the year, something has gone very wrong economically,” he said, adding that for now, the market’s focus is the short term.

MSCI’s gauge of shares worldwide was rising 1.48% and was on track for its biggest one-day percentage gain since January 6. However, it still saw a slight decline for the week.

The Dow Jones Industrial Average rose 546.64 points, or 1.65%, to 33,674.38, the S&P 500 rose 75.03 points, or 1.85%, to 4,136.25 and the Nasdaq Composite rose 269.02 points, or 2.25%, to 12,235.41.

Under the hood, oil’s rebound helped boost the energy equity index. US crude was up 4.05% at $71.34 a barrel and Brent was up 3.86% at $75.30.

The biggest boost from a single stock for all three major US indexes was from technology heavyweight Apple Inc, which soared after its quarterly report impressed investors.

Investors also halted their exits from US banks, pushing the KBW Regional Bank Index up 4.7%. However the sectoral index was down about 8% for the week following the weekend collapse of First Republic Bank, following a sharp decline in the previous four sessions.

In currencies, the dollar index fell 0.059%, with the euro rising 0.05% to $1.1016. The Japanese yen weakened 0.39% versus the greenback at 134.84 per dollar, while sterling last traded at $1.2633, up 0.49% on the day.

In Treasuries, the benchmark 10-year note rose 7.9 basis points to 3.431% from 3.352% late Thursday. The 30-year bond advanced 2.4 basis points to yield 3.7464%. The 2-year note was last up 18.7 basis points at 3.9139%.

After hitting near record highs in the previous session, gold retreated sharply following hopes of a Fed rate cut following payrolls data.

Spot gold fell 1.7% to $2,017.03 an ounce. US gold futures fell 1.76% to $2,017.40 an ounce.

(Additional reporting by Ankur Banerjee in Singapore. Editing by Jacqueline Wong, Robert Birsel, Keith Weir, Alexander Smith, David Gregorio and Diane Craft)