US market ignores strong payrolls & rising yields to bounce back

US stocks bounced back in Friday trading ignoring a hotter than expected payrolls print and upward pressure on bond yields.

The Dow rose 307.06 points, or 0.8 per cent, to close at 38,904.04. The S&P 500 gained 1.11 per cent to end the day at 5,204.34. The Nasdaq was the best performing index rising 1.24 per cent, closing at 16,248.52.

Despite the bounce, all three indexes posted a losing week. The Dow slid 2.27 per cent, posting its worst weekly performance in 2024. The S&P 500 declined 0.95 per cent during the period, while the Nasdaq lost 0.8 per cent.

On Friday, the Labor Department’s report showed that job growth totalled 303,000 in March. Nonfarm payrolls were expected to increase by 200,000, according to Dow Jones estimates. Wages rose 0.3 per cent for the month and 4.1 per cent from a year ago, both in line with estimates. As a result, treasury yields jumped.

Investors are torn between wanting a strong economy to support further corporate earnings growth and wanting a weaker jobs market that will give the Federal Reserve the green light to begin cutting interest rates.

The Russell 2000 index is on track to experience its most significant weekly decline since January, with small-cap stocks facing notable struggles, as indicated by a 2.9 per cent decrease by Friday afternoon. This performance underscores a broader trend of small-cap stocks underperforming this year, with the index poised for a larger loss compared to the three major averages for the week.

Turning to US sectors, all closed higher on Friday. Communication Services was the best performer. Consumer Staples recorded the fewest gains.

Futures

The SPI futures are pointing to a 0.5 per cent gain.

Currency

One Australian dollar at 7.35am was buying 65.74 US cents.

Commodities

Gold gained 1.60 per cent. Silver added 0.94 per cent. Copper fell 0.31 per cent. Oil added 0.37 per cent.

Figures around the globe

European markets closed lower. London’s FTSE fell 0.81 per cent, Frankfurt dropped 1.24 per cent, and Paris closed 1.11 per cent lower.

Turning to Asian markets, Tokyo’s Nikkei lost 1.96 per cent, Hong Kong’s Hang Seng shed 0.01 per cent and China’s Shanghai Composite was closed.

On Friday, the Australian share market closed 0.56 per cent lower at 7,773.27.

Dividends payable
Adairs Ltd (ASX:ADH)
Atlas Arteria Ltd (ASX:ALX)
Austin Engineering Ltd (ASX:ANG)
Cleanaway Waste Management Ltd (ASX:CWY)
Endeavour Group Ltd (ASX:EDV)
Fleetwood Ltd (ASX:FWD)
Perpetual Ltd (ASX:PPT)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

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