The S&P 500 turned positive Friday, aided by a rally in Amazon and an unexpectedly strong monthly jobs report that sent U.S. Treasury yields to two-year highs.
The S&P 500 rose 0.52% to 4,500, , the Dow Jones Industrial Average slid 0.06% to 35,089 while the NASDAQ rallied 1.58% to 14,098.
The U.S. economy created 467,000 jobs last month, well above the expectations for 150,000, led by job gains in the leisure and hospitality sector, which confounded expectations that an omicron-impact would weigh on the services industry.
“The jobs data today was incredibly strong, even before the stellar revisions, so the Fed has the green light to start moving off of zero very soon,” said Jamie Cox, managing partner for Harris Financial Group.
The report suggests demand for labour remains robust and further reinforces Fed chairman Jerome Powell’s description last week of the labour market as “strong”.
Average hourly earnings increased by a better than expected 0.7% for the month, while the unemployment rate ticked higher to 4%.
An unexpectedly strong number isn’t likely to change the Fed’s thinking on policy but may serve to drown out “the ‘policy mistake’ narrative in the market that bubbled up as the Fed turned more hawkish in recent months,” Jefferies said in a note.
U.S. yields surged on expectations for more aggressive Fed action, with the U.S. 10-year yield jumping 4.85% to 1.916 for the first time in two years. The two-year yield rose to 1.316 per cent; the five-year yield reached 1.78 per cent.
Tech climbed out of early-day trouble against the backdrop of rising rates as surge in Amazon restored sentiment on growth somewhat after Meta’s plunge a day earlier.
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