Traders work on the floor of the New York Stock Exchange during morning trading on February 29, 2024 in New York City.
Michael M. Santiago | Getty Images
Stocks rebounded Friday following the Dow Jones Industrial Average’s worst session in over a year as traders cheered a stronger-than-expected jobs report and looked past a jump in rates.
The S&P 500 gained 0.8%, while the 30-stock Dow climbed 185 points, or 0.5%. The tech-heavy Nasdaq Composite advanced 0.9%. Despite Friday’s rebound, all three still headed for a losing week.
Treasury yields jumped following the report showing that job growth totaled 303,000 in March. Nonfarm payrolls were expected to increase by 200,000, according to Dow Jones estimates. Wages rose 0.3% for the month and 4.1% from a year ago, both in line with estimates.
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.
“Markets are understandably confused, but the underlying economic circumstances which are the actual data series being released, like the jobs report, just continue to affirm two things: strong employment growth…and that the economy is not anywhere near recession.” Jamie Cox, managing partner of Harris Financial Group, said.
“At the end of the quarter, markets ran up a lot more than they should have, so there was going to be some selling pressure regardless this week,” he continued, adding that this week’s sell-off was accelerated by fears of escalation in the Middle East and inconsistent speeches from various Fed speakers.
The Dow tumbled about 530 points, or 1.35%, on Thursday, marking its biggest daily drop since March 2023 and its fourth consecutive losing session. A jump in crude oil and comments from Minneapolis Federal Reserve President Neel Kashkari, where he questioned if interest rates should come down amid sticky inflation, were behind the pullback.
Overall this week higher rates have plagued stocks. The Dow has led the three major indexes down this week, pacing for a loss of about 2%. The S&P 500 and Nasdaq have each slid around 1%. Those moves mark a retreat after the strong first quarter concluded last week, leading some market participants to wonder if a correction is warranted following big gains. The 10-year Treasury yield was last around 4.38% Friday, up from 4.19% a week ago.
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