Dow, S&P 500, Nasdaq Rise After Jobs Report; Trump-Musk Spat; Tesla, DJT, and More Movers
Worries on Wall Street of the labor market’s demise may have jumped the gun.
After the May nonfarm payrolls report countered worries of a looming labor market downturn for now, a broad stock market rally took hold on Friday.
The S&P 500 was up 1%. The Dow rose 400 points, or 1%. The Nasdaq Composite gained 1.3%.
“While the market strength in the face of economic, geopolitical, and budget uncertainty is notable, the remarkable calm that has returned to markets is impressive,” writes Mark Hackett, chief market strategist at Nationwide.
The CBOE Volatility Index, or VIX, was down 1.3 points to 17.18 on Friday after spiking to nosebleed levels north of 60 during April’s tariff-fueled selloff. A reading below 20 is viewed as a sign of relatively low volatility in the market.
The jobs report was by no means a blowout, and revisions lower totaled 95,000 jobs in March and April.
“Nevertheless, it shows that tariffs are having little negative impact,” writes Stephen Brown, deputy chief North America economist at Capital Economics. “At the margin, the recent strength in averaging hourly earnings growth is another reason for the Fed to remain on pause while it assesses the effects of policy changes on the economy.”
The report also caught the bond market on the back foot: the yield on the 2-year Treasury note was back above 4% to 4.04%. The 10-year yield rose to 4.49%. Rosenberg Research’s David Rosenberg argues the 0.4% monthly uptick in average hourly earnings caught the bond market off guard.
“And that comes as a big surprise because we can see that the voluntary ‘quit rate,’ which moves directionally with wage growth, fell for the fourth month in a row (13.2% in January to 12.9% in February to 12.3% in March to 11.8% in April to 9.8% in May) — a four-year low,” Rosenberg writes. “So somehow, greater worker anxiety and reduced confidence is translating into higher wage growth in a report replete with inconsistencies.”
He thinks the bond market should “take comfort in the fact that this jobs report was not nearly as strong as the headline.”
“And keep in mind that even if you believe in +139k, the reality is that during the tariff battle in Trump 1.0, back in 2019, the Fed cut rates three times in the last five months of that year and nonfarm payrolls averaged +172k through that stretch — only after inflation started to settle back down,” Rosenberg concludes.
