Healthy jobs report boosts Wall Street

Third week in row benchmark index pulls off winning finish

NEW YORK — Stocks notched modest gains and Treasury yields soared Friday on Wall Street after a healthy report on the U.S. job market strengthened expectations for coming interest rate hikes.

The S&P 500 rose 0.3 percent after bouncing between small gains and losses. The benchmark index eked out a slight gain for the week, it’s third straight amid lingering concerns about high inflation, higher interest rates from the Federal Reserve and the economic effects of the war in Ukraine.

The Dow Jones Industrial Average rose 0.4 percent and the Nasdaq composite rose 0.3 percent. Small company stocks outgained the broader market, driving the Russell 2000 1 percent higher.

The sharpest action was again in the bond market, where the yield on the twoyear Treasury approached its highest level in more than three years.

Yields jumped after a U.S. government report showed employers added 431,000 jobs last month. That was slightly below economists’ expectations for 477,500, but the report also revised earlier months’ data to reflect more strength. It showed raises for workers accelerated last month but at a slower pace than overall inflation, while the unemployment rate improved to 3.6 percent from 3.7 percent.

“This was a solid report,” said Brian Jacobsen, senior investment strategist at Allspring Global Investments.

“You can see the worries about COVID fading. Fewer people are working remotely. Fewer people are saying they can’t work due to the pandemic.”

A separate report showed that U.S. manufacturing is continuing to grow, though at a slower rate than in February.

A strong jobs market and economy give the Federal Reserve more leeway to raise interest rates sharply in order to beat down the high inflation that’s sweeping the country.

The Fed has already raised its key overnight rate once, the first such increase since 2018. Following

Friday’s jobs report, traders increased bets that the Fed will raise rates at its next meeting by double the usual amount.

Such expectations drive shorter-term Treasury yields in particular, and the twoyear yield leaped to 2.45 percent from 2.28 percent late Thursday.

The two-year yield again rose above the 10-year yield, which was also climbing, but not as quickly. The 10-year yield rose to 2.38 percent from 2.33 percent.

On Tuesday, the two-year yield briefly topped the 10year yield for the first time since 2019, a potentially ominous sign.