In the latest government jobs report, US stocks saw an upward trend despite indications of a slowing, yet tight labor market. Nonfarm payrolls added 187,000 jobs, falling slightly below expectations of 200,000 jobs, while the unemployment rate decreased to 3.5%.
The mixed report supported the notion of a “soft-landing” scenario, easing concerns of an overheating economy and possible rate hikes.
The Dow Jones Industrial Average and S&P 500 both registered gains, and the technology-heavy Nasdaq Composite showed a significant increase. Meanwhile, European stock indexes experienced declines.
The MSCI All-World index rebounded after a weekly drop driven by rising government bond yields and inflation concerns.
Economists are increasingly considering the possibility of a soft-landing for the economy as envisioned by the U.S. Federal Reserve. However, the market remains fragile amid the implications of rising Treasury yields. The U.S. dollar weakened against major currencies, including the pound, following a smaller than expected rate rise by the Bank of England.
China’s yuan gained stability as the central bank assured flexible policy tools to maintain ample liquidity. Investors are hopeful for broad-based stimulus measures to bolster the post-pandemic recovery. Considering weak domestic and international demand for the world’s second-largest economy. U.S.
Treasury yields declined after the jobs report. And Fitch’s surprise downgrade of the U.S. credit rating put government finances in the spotlight. Lastly, oil prices are set for a sixth consecutive weekly gain due to reduced supply expectations from Saudi Arabia and Russia.