S&P 500 futures and government bond yields rose on Friday during a holiday-shortened trading session after the March jobs report showed a resilient economy and moderate inflation.
S&P 500 futures were up 0.2%. Futures on the Dow Jones Industrial Average gained 55 points. However, the Nasdaq 100 futures were flat.
The 2-year Treasury yield rose 10 basis points to 3.93%. The 10-year government bond yield increased 8 basis points to 3.37%. (One basis point equals 0.01% and yields move inversely with prices.)
The US added 236k jobs in March, around in line with expectations, with the unemployment rate falling to 3.5% from 3.6% in the previous month. Non-farm payrolls were expected to increase by 238,000 based on the consensus estimate of Dow Jones economists. The same economists were expecting the unemployment rate to remain stable at 3.6%.
Average hourly earnings rose 4.2% on a 12-month basis, the lowest level since June 2021.
The New York Stock Exchange is closed on Good Friday, so regular trading doesn’t start until Monday. Futures and bond trading will close early on Friday.
The S&P 500 fell 0.1% for the week ended Thursday, breaking a 3-week winning streak as a series of weak jobs data suggested to investors that a recession might be imminent. The Nasdaq Composite was down 1.1% for the week while the Dow posted a small gain.
Earlier this week, ADP said private payrolls slowed significantly in March, Labor Department data showed job vacancies fell to their lowest level in almost two years and weekly jobless claims were higher than expected.
Friday’s jobs report contradicts this weak data and is likely to divide investors. Some may like the robust economy, while others may not mind if the job market weakens a bit to get the Federal Reserve to end its ongoing tightening campaign. The Fed’s next interest rate decision is on May 3rd.
The March jobs report “provides an update on the jobs picture, paving the way for the FOMC to hike another quarter point in May if next week’s CPI release dictates it,” wrote Ian Lyngen, head of US rates strategy at BMO Capital Markets .
The consumer price index for March is due on Wednesday.