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 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.
“Unemployment remains relatively low, but the cause may be minimal labour force participation rather than a booming economy,” said Richard Flynn, managing director at Charles Schwab UK. “Investors will be mindful that jobs reports are a lagging indicator that are often strong heading into a recession. Indeed, broader economic indicators have been weakening recently.
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 slightly 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% as of 9:30 a.m. New York time
- The Nasdaq 100 rose 1%
- The Dow Jones Industrial Average rose 0.8%
- The Stoxx Europe 600 rose 1.2%
- The MSCI World index fell 0.8%
Currencies
- The Bloomberg Dollar Spot Index fell 0.3%
- The euro rose 0.6% to $1.0005
- The British pound was little changed at $1.1554
- The Japanese yen was little changed at 140.24 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 1.52%
- Britain’s 10-year yield advanced one basis point to 2.89%
Commodities
- West Texas Intermediate crude rose 2.8% to $89.03 a barrel
- Gold futures rose 0.7% to $1,721.50 an ounce
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