NEW YORK :Wall Street rebounded on Friday and U.S. Treasury yields jumped as a generally upbeat employment report and a bounce-back in Tesla shares helped put the indexes on track for weekly advances.
All three major U.S. stock indexes surged from the starting gate with robust gains, while bitcoin jumped and crude prices touched their highest level since late April.
The U.S. economy added 139,000 jobs in May, topping analyst expectations, while the unemployment rate held firm at 4.2 per cent, according to the Labor Department. The report also showed hotter-than-anticipated wage growth, rounding out a report that is unlikely to convince the U.S. Federal Reserve to cut its key policy rate in the near-term.
“This is a sigh of relief report; people were really worried that this was going to be a kind of start of a downturn in the labor market and therefore start the downturn in the economy,” said Scott Ladner, chief investment officer at Horizon Investments in Charlotte, North Carolina.
“And it came in pretty much on the screws and we’ve got a sort of a bit of a reprieve, at least for a month. And that’s leading to a pretty large relief rally,” Ladner added.
Tesla stock was last up 5.9 per cent.
The previous day, the very public spat between U.S. President Donald Trump and his top advisor billionaire Elon Musk had shaken the markets, sending shares of Musk-helmed Tesla tumbling, which helped drag the indexes decisively lower.
The falling-out between the erstwhile political allies revived concerns over Trump’s “Big Beautiful Bill” of tax and spending plans and its effect on the growing deficit.
Tariff negotiations between the U.S. and its trading partners remain fluid, with the European Union and India working toward ironing out deals, and further talks between Washington and Beijing promised after Trump’s phone call on Thursday with Chinese President Xi Jinping.
The Dow Jones Industrial Average rose 485.78 points, or 1.15 per cent, to 42,805.52, the S&P 500 rose 66.69 points, or 1.12 per cent, to 6,005.88 and the Nasdaq Composite rose 252.22 points, or 1.31 per cent, to 19,550.67.
European shares followed their U.S. counterparts higher after the jobs report, as investors remain on the lookout for signs that tensions and uncertainties arising from Trump’s erratic trade policies have begun to dampen the economy.
MSCI’s gauge of stocks across the globe rose 5.53 points, or 0.62 per cent, to 892.36.
The pan-European STOXX 600 index rose 0.31 per cent, while Europe’s broad FTSEurofirst 300 index rose 6.86 points, or 0.31 per cent
Emerging market stocks fell 1.29 points, or 0.11 per cent, to 1,181.39. MSCI’s broadest index of Asia-Pacific shares outside Japan closed lower by 0.14 per cent to 622.39, while Japan’s Nikkei rose 187.12 points, or 0.50 per cent, to 37,741.61.
The dollar gained ground against major currencies in the wake of the better-than-expected employment data.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.57 per cent to 99.22, with the euro down 0.48 per cent at $1.1389.
Against the Japanese yen, the dollar strengthened 1 per cent to 144.96.
The report also prompted a rally in bitcoin, which gained 4.31 per cent to $104,840.63. Ethereum rose 5.02 per cent to $2,519.33.
U.S. Treasury yields also rode the wave of the upbeat jobs data. The yield on benchmark U.S. 10-year notes rose 7.5 basis points to 4.47 per cent, from 4.395 per cent late on Thursday. The 30-year bond yield rose 5.1 basis points to 4.9346 per cent from 4.884 per cent late on Thursday.
The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 8.8 basis points to 4.012 per cent, from 3.924 per cent late on Thursday.
Crude prices were on track for their first weekly gain in three after Trump and Xi resumed trade talks, raising hopes of demand growth.
U.S. crude rose 1.88 per cent to $64.56 a barrel and Brent rose to $66.33 per barrel, up 1.52 per cent on the day. Gold prices dipped in opposition to the strengthening greenback.
Spot gold fell 0.69 per cent to $3,329.83 an ounce. U.S. gold futures fell 0.62 per cent to $3,330.00 an ounce.
