Wall St ends sharply higher, jobs data strengthens case for rate cuts
U.S. job growth slows, unemployment ticks higher in April
Apple announces record share buyback, stock jumps
Expedia tumbles after cutting revenue growth forecast
Indexes up: Dow 1.18%, S&P 1.26%, Nasdaq 1.99%
Updates to 16:07 EDT
By Stephen Culp
NEW YORK, May 3 (Reuters) -Wall Street surged to a higher close on Friday as a softer-than-expected employment report bolstered the case for rate cuts from the Federal Reserve while also providing evidence of U.S. economic resilience.
All three major U.S. stock posted robust gains. The tech-heavy Nasdaq led the pack, rising 2% with an assist from Apple shares AAPL.O following the iPhone maker's record share buyback announcement.
All three indexes notched their second straight Friday-to-Friday gains, capping a week in which markets were encouraged by Fed Chair Jerome Powell's more dovish-than-expected statements following Wednesday's rate decision.
The Labor Department's employment report showed the U.S. economy added fewer jobs than expected, while the unemployment rate ticked higher and wage growth unexpectedly cooled.
The report likely hit the sweet spot for the Fed, offering signs the labor market is softening, which Powell has deemed necessary to put inflation on a sustainable downward path. The report also provided assurances on U.S. economic health.
The report prompted investors to raise bets the Fed would implement its first rate reduction in September.
"The investor narrative remains the Fed and interest rates and today’s weak jobs report puts rate cuts firmly on the Fed’s 2024 agenda," said Greg Bassuk, CEO at AXS Investments in New York. "And while 'higher for longer' remains the roadmap, this economic data is being warmly embraced by investors, Wall Street and Main Street, across all sectors"
Fed officials weighed in on the data.
Fed Governor Michelle Bowman reiterated her willingness to hike rates if inflation progress reverses, and Chicago Fed President Austan Goolsbee said the employment report boosted confidence the economy is not overheating.
"Let's remember, it's early May; we shouldn't pretend that the year's over or somehow every card has been played," said Oliver Pursche, senior vice president at Wealthspire Advisors, in New York. "But I don't think for a second that any Fed official really believes that a rate hike is appropriate given current conditions and data."
First-quarter earnings season is approaching the final stretch, with 397 of the companies in the S&P 500 having reported as of Friday morning. Of those, 77% have posted consensus-beating results, according to LSEG data.
Apple surged 6.0%,after the company unveiled a record $110 billion share buyback program and beat quarterly expectations.
Shares of biotech firm Amgen AMGN.O jumped 11.8% after encouraging interim data on its experimental weight-loss drug MariTide and first-quarter earnings.
Travel platform Expedia EXPE.O cut its full-year revenue growth forecast, sending its shares sliding 15.3%.
The Dow Jones Industrial Average .DJI rose 450.02 points, or 1.18%, to 38,675.68, the S&P 500 .SPX gained 63.59 points, or 1.26%, to 5,127.79 and the Nasdaq Composite .IXIC added 315.37 points, or 1.99%, to 16,156.33.
Of the 11 major sectors in the S&P 500, all but energy .SPNY ended the session in positive territory, with technology .SPLRCT claiming the largest percentage gain at 3.0%.
Advancing issues outnumbered declining ones on the NYSE by a 3.62-to-1 ratio; on Nasdaq, a 2.00-to-1 ratio favored advancers.
The S&P 500 posted 21 new 52-week highs and one new low; the Nasdaq Composite recorded 95 new highs and 65 new lows.
Volume on U.S. exchanges was 10.72 billion shares, compared with the 11.07 billion average for the full session over the last 20 trading days.
Nonfarm payrolls https://reut.rs/44o7Vgv
Reporting by Stephen Culp; Additonal reporting by Shristi Achar A and Shashwat Chauhan in Bengaluru; Editing by David Gregorio
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.