Highlights
Signs of slower US wage growth helped equities rebound Friday as investors hoped slowing inflation would allow the Federal Reserve to relax its tight policy stance. The Dow Jones industrial average rose 2.2 percent, the S&P 500 gained 2.3 percent, and the NASDAQ advanced by 2.6 percent. US Treasury yields and the dollar declined while NYMEX crude oil prices were flat.
Investors fastened on average hourly earnings up 4.6 percent year on year in December, down from 4.8 percent in November and expectations for 5 percent. They chose not to react to news that unemployment fell more than expected to 3.5 percent from 3.7 percent. And markets appeared unfazed by a series of comments from Fed officials downplaying the latest employment figures.
US Treasury yield fell back on the jobs data, and dropped further after a surprisingly downbeat US purchasing managers report showing business activity in the services sector contracted for the first time since May 2020. Megacaps led the rally and the S&P 500 broke above resistance at 3850.
Gains were across the board. Best performers included financials, utilities, energy, consumer staples, and real estate. Tesla was among the day's winners as it reversed early losses suffered on more bad news about sales in China to end 2.5 percent higher.
Investors fastened on average hourly earnings up 4.6 percent year on year in December, down from 4.8 percent in November and expectations for 5 percent. They chose not to react to news that unemployment fell more than expected to 3.5 percent from 3.7 percent. And markets appeared unfazed by a series of comments from Fed officials downplaying the latest employment figures.
US Treasury yield fell back on the jobs data, and dropped further after a surprisingly downbeat US purchasing managers report showing business activity in the services sector contracted for the first time since May 2020. Megacaps led the rally and the S&P 500 broke above resistance at 3850.
Gains were across the board. Best performers included financials, utilities, energy, consumer staples, and real estate. Tesla was among the day's winners as it reversed early losses suffered on more bad news about sales in China to end 2.5 percent higher.
Definition
Market Reflections track market reaction to the trading day's major events. Economic data, policymaker speeches, and company news are featured in this report as well as key indexes and financial instruments.
Description
Understanding why markets respond as they do is fundamental for an investor. Market Reflections help explain how the day's events, news, and data impact the outlook for the economy and for market prices.
