Stocks rose Friday after a soft jobs report drove bond yields lower, and the major averages registered their best week in 2023.
The Dow Jones Industrial Average gained 222.24 points, or 0.66% to 34,061.32. The S&P 500 climbed 0.94% to 4,358.34 and notched its first five-day advance since June. The Nasdaq Composite jumped 1.38% to 13,478.28.
Equities notched sizable weekly gains as investors grew hopeful that the Federal Reserve’s rate-hiking campaign is over. The Dow was up by 5.07% in its best week since October 2022. The S&P 500 was higher by 5.85% and the Nasdaq gained 6.61%. It was the best week for both indexes since November 2022.
Dow Jones Industrial Average
The October jobs report on Friday came in weaker than expectations, showing the Fed’s attempt to cool the economy and stifle inflation could be working. The U.S. economy last month added 150,000 jobs, below the 170,000 payrolls increase consensus estimate from Dow Jones, and lower than September’s blowout of 297,000 jobs added. The unemployment rate rose to 3.9%, compared to expectations that it would hold steady at 3.8%.
Average hourly earnings also missed expectations on a monthly basis, rising 0.2% in October, below the anticipated 0.3% increase.
“From an equity market perspective, this reading takes some of the pressure off inflation and interest rate concerns, while still reflecting a robust labor market that is adding jobs faster than the neutral rate of approximately 100K,” said Michelle Cluver, portfolio strategist at Global X.
Bond yields, which have weighed on the stock market the last three months, tumbled Friday in the wake of the softer-than-expected payrolls figures and lighter average hourly earnings increase. The 10-year Treasury yield lost more than 9 basis points to 4.57%, down from the 5% high it hit last month. The 2-year Treasury yield lost 13 basis points to 4.8%.
Yields and prices move in opposite directions. One basis point equals 0.01%.
U.S. 10-year Treasury
The S&P 500 rallied Friday without participation from its biggest member. Apple fell 0.5% after the iPhone maker issued a weak revenue outlook for the December quarter.
The rebound this week came as the S&P 500 closed out a dismal period of three months straight with losses. The rally this week was sparked by the Fed’s decision to hold rates steady for a second straight time, along with the Department of Treasury’s borrowing plans that were less burdensome than feared.
— CNBC’s Jeff Cox, Alex Harring and Chris Hayes contributed reporting.
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