Stocks Gain While Dollar Retreats As US Labor Market Cools
Sumaira FH Published May 04, 2024 | 09:50 AM
New York, (APP - UrduPoint / Pakistan Point News - 4th May, 2024) Stock markets rose Friday as cooling US job growth raised hopes of interest-rate cuts, while London hit another record high following speculation of a bidding war for mining giant Anglo American.
Investors had been keenly awaiting the data, as the US non-farm payrolls (NFP) figures are key to the Federal Reserve's decision-making on when to lower interest rates.
The Fed kept rates at a 23-year high on Wednesday to fight stubborn inflation.
Hiring in the world's biggest economy came in at 175,000 last month, down from a revised March figure of 315,000, while wages rose by 0.2 percent, said the US Department of Labor.
Analysts at forex.com had expected the US economy to add 238,000 jobs last month, and wages to increase by 0.3 percent month on month.
"This is a rare miss for the US jobs market which could potentially spell the end of the 'higher for longer' rhetoric we have become accustomed to," said Mahmoud Alkudsi, senior market analyst at Abu Dhabi-based financial services firm ADSS.
A string of data this year showing inflation was holding stubbornly above target, while the economy and labor market remain resilient, has seen the Fed indicate it will have interest rates higher for longer.
Markets had started the year expecting the Fed would cut rates six times this year, but those expectations dwindled to one or two.
"It was good enough to show the market that the economy should continue to grow, which is a good thing for earnings," Patrick O'Hare of Briefing.com said of the jobs report.
At the same time, the figures were likely to "validate" Fed Chair Jerome Powell's belief that the next policy move is unlikely to be a rate hike.
The Dollar slid against its main rivals after the data was released.
"We will also see weaker US bond yields, with risk assets continuing to see upside," he added.
All three major US indices gained more than one percent.
- Key figures around 2250 GMT -
New York - Dow: UP 1.2 percent at 38,675.68 (close)
New York - S&P 500: UP 1.3 percent at 5,127.79 (close)
New York - Nasdaq Composite: UP 2.0 percent at 16,156.33 (close)
London - FTSE 100: UP 0.5 percent at 8,213.49 (close)
Paris - CAC 40: UP 0.5 percent at 7,957.57 (close)
Frankfurt - DAX: UP 0.6 percent at 18,001.60 (close)
EURO STOXX 50: UP 0.6 percent at 4,921.48 (close)
Hong Kong - Hang Seng Index: UP 1.5 percent at 18,475.92 (close)
Tokyo - Nikkei 225: Closed for a holiday
Shanghai - Composite: Closed for a holiday
Dollar/yen: DOWN at 152.99 Yen from 153.64 yen on Thursday
Euro/dollar: UP at $1.0767 from $1.0725
Pound/dollar: UP at $1.2546 from $1.2534
Euro/pound: UP at 85.78 from 85.56 pence
West Texas Intermediate: DOWN 1.1 percent at $78.11 per barrel
Brent North Sea Crude: DOWN 0.8 percent at $82.96 per barrel
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