Selloff or Market Correction? Either Way, Here's What to Do NextSee Overvalued Stocks

Stocks jump, dollar and yields drop after US jobs market softens

Published 03/11/2023, 01:32 pm
Updated 04/11/2023, 08:03 am
© Reuters. FILE PHOTO: A woman walks past a man examining an electronic board showing Japan's Nikkei average and stock quotations outside a brokerage, in Tokyo, Japan, March 20, 2023. REUTERS/Androniki Christodoulou/File Photo
AUD/USD
-
AAPL
-
LCO
-
ESH25
-
BTC/USD
-

By Caroline Valetkevitch

NEW YORK (Reuters) - Global stock indexes rose sharply, the U.S. dollar dropped to a six-week low and benchmark 10-year U.S. Treasury yields fell to five-week lows on Friday after data showed U.S. job growth slowed more than expected in October.

The job growth slowdown underscored views that the Federal Reserve may be done hiking interest rates.

Also, U.S. two-year yields were the lowest since early September after the data, which showed U.S. job growth slowed in part as strikes by the United Auto Workers union against Detroit's "Big Three" carmakers depressed manufacturing payrolls.

The data also showed the increase in annual wages was the smallest in nearly 2-1/2 years, pointing to an easing in labor market conditions.

"The good news here is that the slowdown will likely keep the Fed on the sidelines going forward," said Brad McMillan, chief investment officer for Commonwealth Financial Network in Waltham, Massachusetts.

"One of their key concerns has been an overheated economy, especially after last quarter's GDP growth, and this suggests that problem is going away."

Wednesday's U.S. central bank decision to leave rates unchanged and comments by Fed Chair Jerome Powell indicated to some investors that the Fed may be done raising rates. The Bank of England on Thursday also left rates unchanged.

Central bank officials however stressed that more may need to be done to tackle inflation.

Traders are now pricing in only a 5% chance of a Fed rate hike in December, down from 20% on Thursday, while the odds of a January increase have slipped to 11% from 28%, according to the CME Group's (NASDAQ:CME) FedWatch Tool.

Benchmark 10-year yields fell as low as 4.484%, the lowest since Sept. 26. Two-year note yields reached 4.807%, the lowest since Sept. 1.

A decision on Wednesday by the U.S. Treasury to issue less long-term debt than expected also fuelled the rally in bonds, as did data on Thursday suggesting the U.S. economy might finally be cooling.

The Dow Jones Industrial Average rose 222.24 points, or 0.66%, to 34,061.32, the S&P 500 gained 40.56 points, or 0.94%, to 4,358.34 and the Nasdaq Composite added 184.09 points, or 1.38%, to 13,478.28.

Bucking the trend of the broader market, Apple shares (NASDAQ:AAPL) fell 0.5%, a day after the company reported quarterly results and warned of a dull holiday quarter.

The three major U.S. stock indexes also posted gains for the week, with the S&P 500 registering its biggest weekly percentage jump since November 2022.

The pan-European STOXX 600 index rose 0.17% and MSCI's gauge of stocks across the globe gained 1.18%. The MSCI index was up 5.3% for the week, also the biggest weekly percentage increase since November 2022.

The U.S. dollar index dropped to a six-week low after the jobs data. In afternoon trading, the dollar index fell 1.111%, with the euro up 1.07% to $1.0734.

The Japanese yen strengthened 0.72% versus the greenback at 149.31 per dollar, while sterling was last trading at $1.2379, up 1.46% on the day.

In commodities, oil prices ended more than 2% lower, with the geopolitical risk premium waning.

© Reuters. FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., October 27, 2023.  REUTERS/Brendan McDermid/File Photo

Brent crude futures settled at $84.89 a barrel, while U.S. crude futures settled at $80.51.

Spot gold added 0.4% to $1,994.31 an ounce.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.