U.S. jobs report/ Wall Street rise October 2024/ stock market gains jobs data/ U.S. economy growth/ Federal Reserve interest rate cuts/ Newslooks/ NEW YORK/ J. Mansour/ Morning Edition/ U.S. stocks rose on Friday following a stronger-than-expected jobs report, with the S&P 500 climbing 0.7% and the Dow Jones adding 266 points. The report showed employers added 254,000 jobs in September, surpassing forecasts and fueling optimism about the economy. Treasury yields also rose, as traders adjusted expectations for future Federal Reserve interest rate cuts.
Wall Street Rises on Strong Jobs Report Quick Looks
- Jobs surge: U.S. employers added 254,000 jobs in September, far surpassing expectations.
- Stock gains: The S&P 500, Dow Jones, and Nasdaq all saw increases, reversing losses earlier in the week.
- Treasury yields rise: Bond yields jumped as traders adjusted forecasts for Fed rate cuts.
- Oil prices: Crude prices ticked up modestly amid ongoing tensions in the Middle East, but the market remains stable.
Wall Street Climbs After Strong Jobs Report Boosts Optimism
Deep Look
Wall Street surged on Friday after a robust jobs report indicated that the U.S. labor market remains strong. The report, released by the U.S. Labor Department, showed that employers added 254,000 jobs in September, a significant jump from the 159,000 jobs added in August and far exceeding economists’ forecasts. This latest sign of economic strength sent stocks higher, with the S&P 500 climbing 0.7%, the Dow Jones Industrial Average rising by 266 points (0.6%), and the Nasdaq composite up 1.2% in early trading.
The strong job numbers provided a much-needed boost for the markets, which had been rattled earlier in the week by rising tensions in the Middle East. Concerns over potential disruptions to the global oil supply, following Iran’s missile attack on Israel, had sent crude prices soaring and weighed on investor sentiment. While oil prices edged up again on Friday, the increases were modest compared to earlier in the week, helping to calm market jitters. Brent crude, the international oil benchmark, rose 0.8% to $78.24 per barrel, while U.S. crude gained 0.5% to $74.09.
Amidst these global concerns, the U.S. economy’s resilience became the dominant factor driving markets. The stronger-than-expected jobs report fueled optimism that the U.S. economy could continue growing, even as the Federal Reserve works to balance economic expansion with inflation control. In September, the Fed cut its main interest rate for the first time in more than four years to support growth, and the strong jobs data reinforced confidence in this strategy.
Lindsay Rosner, head of multi-sector investing at Goldman Sachs Asset Management, described the report as a “grand slam,” suggesting that policymakers at the Federal Reserve are likely pleased with how the economy is performing. “The Fed must be smiling,” she noted, as the economy shows signs of maintaining momentum while keeping inflation in check.
The positive data capped a week filled with encouraging news about the U.S. job market. Layoffs remain near historically low levels, and employers are still actively hiring, allaying concerns that the Federal Reserve’s previous interest rate hikes would lead to a significant economic slowdown. The labor market’s resilience is a key indicator that the Fed’s aggressive tightening cycle—marked by 11 rate hikes between 2022 and 2023—has not derailed the U.S. economy.
Before the release of Friday’s jobs report, signs of slowing hiring had been consistent with the Fed’s efforts to cool off an overheated economy and bring down inflation. However, September’s blowout hiring numbers offer hope that the economy is capable of sustained growth. As a result, market watchers are revising their expectations for how the Federal Reserve will adjust interest rates going forward.
Following the release of the jobs data, bond markets reacted quickly. The yield on the two-year Treasury note, which is sensitive to changes in Federal Reserve policy, jumped to 3.86% from 3.71% late Thursday. Meanwhile, the 10-year Treasury yield, which reflects longer-term economic growth and inflation expectations, rose to 3.95% from 3.85%. These movements suggest that traders are now anticipating a more gradual path of interest rate cuts, with just a 9% chance of a larger-than-usual cut of half a percentage point at the Fed’s next meeting, down from a near 50-50 probability earlier in the week.
Outside of the U.S., markets also benefited from the strong jobs report. European stock indexes climbed following the positive news from the world’s largest economy. In Asia, Hong Kong’s Hang Seng index saw a sharp 2.8% rise, adding to a week of gains driven by investor optimism over recent economic measures announced by China to support its slowing economy.
In another key development, approximately 45,000 dockworkers at ports along the East and Gulf coasts returned to work after their union reached an agreement to suspend their three-day strike. This development helped alleviate concerns about potential supply chain disruptions and further boosted market sentiment.
Looking ahead, investors will continue to watch how the U.S. labor market performs, particularly as the Federal Reserve prepares for its next meeting in November. While Friday’s jobs report was an encouraging sign, the path forward for interest rates and economic growth remains a key area of focus as markets try to assess how the central bank will navigate the balance between inflation control and economic support.
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