Wall Street gains following surprisingly strong US jobs report

NEW YORK : Stocks edged higher on Wall Street and Treasury yields rose following a hot US jobs report. The S&P 500 rose 0.2% Friday. The Dow Jones Industrial Average rose 8 points and the Nasdaq composite rose 0.4%. US employers added a surprisingly strong number of jobs in March, which bodes well for the economy but could complicate the Federal Reserve’s path ahead for interest rates. Wall Street is hoping the central bank will start cuting interest rates in June, but strong economic data and worries about inflation reheating could give the Fed a reason to hold off on easing its benchmark rate.

Wall Street pointed modestly higher in premarket trading Friday ahead of a US jobs report that could impact the Federal Reserve’s next decision on interest rates.

Futures for the Dow Jones Industrial Average rose 0.3% before the bell, while S&P 500 futures were up 0.4%.

Those modest gains arrive ater a sell-off this week. Markets dipped sharply Thursday, triggered by comments from a Fed official who raised the possibility of delivering no interest rate cuts this year if inflation worsens. Minneapolis Fed President Neel Kashkari said he’s questioning the need to cut rates if so many areas of the economy look to be solid despite high interest rates.

The U.S. Federal Reserve has been atempting to cool the economy to bring down inflation, but recent data has come in hoter than expected. A report earlier this week showing a surprise return to growth for U.S. manufacturing raised concerns.

The job market also continues to fare beter than expected amid a series of interest rate hikes implemented by the Fed.

Economists are expecting a cooldown in March hiring, data which the Fed could consider at its policy meeting later this month. Analysts are forecasting that the U.S. economy added a solid 200,000 jobs in March, a solid number but down from February’s 275,000 new jobs.

Traders have already drastically scaled back their predictions for how many cuts to interest rates the Federal Reserve would deliver this year, down from six at the start of the year to three more recently. That had them in line with Fed officials generally.

Wall Street is looking for the job market to cool enough to remove upward pressure on inflation, but not so much that it throws too many people out of work and causes a recession.

There have been a lot of layoffs in the tech sector, which grew aggressively during the pandemic. This week, iphone maker Apple said it was leting go of more than 600 workers in California, marking the company’s first big wave of post-pandemic job cuts amid a broader wave of tech industry consolidation. Apple shares barely budged on the news, rising less than 0.4% in off-hours trading.

Johnson & Johnson shares rose modestly ater the pharmaceutical giant said it was acquiring the medical technology company Shockwave. The deal, with an estimated value of slightly more than $13 billion, expands J&J’S cardiovascular treatment capabilities. In energy markets, oil prices were essentially flat but are up 20% so far this year as demand remains robust. A barrel of benchmark U.S. oil was trading withing a few cents of Thursday’s closing price of $86.59 a barrel. Brent crude, the international standard, rose 13 cents to $90.78.

At midday in Europe, France’s CAC 40 and Germany’s DAX each slid 1.4%. Britain’s FTSE 100 shed 1%.

Japan’s benchmark Nikkei 225 dove 2.0% to finish at 38,992.08. Sydney’s S&P/ASX 200 slipped 0.6% to 7,773.30. South Korea’s Kospi dropped 1.0% to 2,714.21. Hong Kong’s Hang Seng was litle changed at 16,723.92.

Tensions in the Middle East added to the sense of pessimism. But some analysts suggested the Fed may cut rates at least once later this year.

“Already there are distinct signs of cooling in economic activity and conditions for sustained wage pressures,” said Tan Jing Yi at Mizuho Bank in Singapore.

Jin Kenzaki and other analysts at Societe Generale Group believe that Chinese and other Asian shares will likely remain strong this month.

“Japan is a major beneficiary of no recession in the U.S., with exporters leading the equity rally,” their report said.

In currency trading, the US dollar edged up to 151.38 Japanese yen from 151.30 yen. The euro cost $1.0835, down from $1.0841.

An upgraded gold price forecast for 2024 from Nicky Shiels, head of metals strategy at Swiss gold refinery MKS PAMP, drew an unexpected followup question this week from market participants. The enquiry was: “Will or can gold ‘go cocoa’?”

Cocoa prices have more than doubled since the start of 2024 due to poor harvests in Ivory Coast and Ghana.

Meanwhile, spot gold, a much more global and liquid market, hit record highs on five previous trading sessions as investors jumped in looking for exposure to the metal used to preserve wealth.