Wall Street Rallies on Strong Jobs Report/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. stocks moved closer to record highs after unemployment unexpectedly declined. The S&P 500 rose 0.5% following stronger-than-forecast job growth. Treasury yields climbed as traders scaled back expectations for Fed rate cuts.
US Stocks Record High – Quick Looks
- S&P 500 up 0.5%, near all-time high
- Dow gains 222 points; Nasdaq rises 0.5%
- 130,000 jobs added last month, beating forecasts
- Treasury yields jump as Fed rate-cut bets ease
- Energy and industrial stocks lead market gains
Deep Look: US Stocks Flirt With Record High as Unemployment Improves
Wall Street edged closer to record territory Wednesday after new government data showed the U.S. unemployment rate unexpectedly improved, easing concerns about the strength of the economy.
The S&P 500 climbed 0.5%, hovering just below the all-time high it set late last month. The Dow Jones Industrial Average rose 222 points, or 0.4%, while the Nasdaq Composite advanced 0.5% in early trading.
Jobs Report Surprises Markets
The rally followed a report from the U.S. Department of Labor showing employers added 130,000 jobs last month — far above the 75,000 economists had projected. The unemployment rate ticked down to 4.3%, signaling resilience in the labor market.
The stronger-than-expected data helped calm jitters sparked earlier in the week by a report suggesting consumer spending — the primary engine of the U.S. economy — might be slowing.
However, the jobs report also included major downward revisions. Payroll growth for all of last year was reduced to 181,000 jobs, down sharply from the previously reported 584,000 and marking the weakest annual performance since the pandemic year of 2020.
Analysts said the revisions were significant but not as severe as feared.
Yields Rise, Rate Cut Bets Ease
Treasury yields jumped in response to the upbeat employment data. The yield on the 10-year Treasury rose to 4.17% from 4.16% the previous day, while the two-year yield — which closely tracks expectations for Federal Reserve policy — climbed more sharply to 3.51% from 3.45%.
The stronger labor data prompted traders to scale back bets on how aggressively the Federal Reserve may cut interest rates this year. While most investors still anticipate at least two rate cuts, expectations for faster easing diminished.
Lower rates typically support stock prices by reducing borrowing costs, but they can also fuel inflation. Investors are now turning their attention to Friday’s inflation update for further signals about the Fed’s next move.
Sector Leaders and Laggards
Energy and industrial stocks led the gains, reflecting optimism about continued economic strength. Caterpillar jumped 3.9%, and Exxon Mobil rose 2.4%.
Not all companies shared in the rally.
Moderna plunged 10.5% after the U.S. Food and Drug Administration declined to review its application for a new mRNA-based flu vaccine, underscoring increased regulatory scrutiny.
Robinhood Markets fell 11% despite reporting stronger-than-expected quarterly profits, as investors focused on weaker revenue and rising projected expenses.
Kraft Heinz dropped 4.1% even after posting better-than-forecast earnings. The company said it would pause plans to split into two businesses while investing $600 million to boost marketing and product development.
Global Markets Follow Suit
Overseas markets also advanced. South Korea’s Kospi gained 1%, while Britain’s FTSE 100 rose 0.9%, reflecting global optimism following the U.S. labor data.
A Market at a Crossroads
The stock market’s approach to record highs underscores investor confidence in the economy’s durability — but questions remain. Slower job growth revisions, persistent inflation risks, and uncertainty around Federal Reserve policy continue to cloud the outlook.
For now, however, Wall Street appears encouraged that the labor market remains solid enough to support growth without triggering immediate recession fears.
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