Wall Street and a gauge of global equity markets rose on Friday as investors cheered signs of economic strength in a report that showed faster-than-expected U.S. jobs growth, data that initially stoked inflation concerns.
The session was marked by frantic trading across the globe. Asian markets dropped overnight. MSCI’s all-country index was on its longest losing streak in six months before clawing back.
All Wall Street’s main indexes closed higher, bouncing back from early losses. Investors were spooked this week by rising interest rates, which offset optimism about an economic rebound.
Microsoft rallied 2.2%, the biggest boost for the S&P 500.
“The market is consolidating itself around what is likely to be some pretty healthy robust economic growth and inflation-related readings out of the economy for the balance of 2021,” said Jeff MacDonald, Head of Fixed-Income Strategies, Fiduciary Trust International in New York.
The Dow Jones Industrial Average rose 572.16 points, or 1.85%, to 31,496.3, the S&P 500 gained 73.47 points, or 1.95%, to 3,841.94 and the Nasdaq Composite added 196.68 points, or 1.55%, to 12,920.15.
The pan-European STOXX 600 index lost 0.78% and MSCI’s gauge of stocks across the globe gained 0.63%.
Emerging market stocks lost 0.52%. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.8% lower, while Japan’s Nikkei lost 0.23%.
The U.S. economy created more jobs than expected in February as new COVID-19 cases fell and additional pandemic relief money boosted hiring at restaurants, putting the labor market recovery on firmer footing.
Still, it will probably take several years for the economy to heal from deep scars inflicted by the pandemic, now in its second year.
The market remained volatile as it was on Thursday when Federal Reserve Chairman Jerome Powell showed little alarm about a rise in bond yields.
Top Federal Reserve officials backed that message. “(W)e are not seeing much movement in real yields” but rather an increase in what bond investors are demanding, Minneapolis Federal Reserve Bank President Neel Kashkari noted.
Treasury yields pulled back from session highs as buyers stepped in after the benchmark 10-year note yield hit its highest in over a year following the payrolls report.
The yield on 10-year Treasury notes was up 2 basis points to 1.570%. The yield climbed as high as 1.625%, its highest since Feb 13, 2020.
Rising Treasury yields fed demand for the dollar. The dollar index jumped as high as 92.201, the highest since Nov. 25, before retracing back to 91.965, up 0.36% on the day.
The euro down 0.43% to $1.1915The Japanese yen weakened 0.39% versus the greenback, last at 108.37 per dollar, its lowest since June.
The strong dollar sank gold prices to a nine-month low as investors sold the precious metal to reduce the opportunity cost of holding the non-yielding asset. [GOL/]
Spot gold added 0.1% to $1,698.93 an ounce. U.S. gold futures fell 0.22% to $1,696.50 an ounce. Earlier, spot gold was at $1,697 per ounce, dipping below $1,700 for the first time since June 2020.
Graphic: U.S. yields, inflation expectations and world stocks:
Oil prices jumped after the Organization of the Petroleum Exporting Countries and its allies agreed to mostly maintain supply cuts in April. [O/R]
U.S. crude recently rose 3.85% to $66.29 per barrel and Brent was at $69.60, up 4.29% on the day.
India, the world’s third-biggest oil importer and consumer, said the decision by major producers to extend output cuts could threaten the recovery in some countries.
“The decision by OPEC+ has saddened us. It is not good news for India, China, Japan, Korea and other consuming nations,” India’s Minister for Petroleum and Natural Gas Dharmendra Pradhan said.