Highlights
Stocks rebounded Friday with good gains nearly across the board after the monthly jobs report topped expectations. The Dow Jones industrial average gained 1.1 percent while the S&P 500 rose 1.0 percent and the Nasdaq was up 1.2 percent. The major indexes posted good gains for a second straight week after a very strong May. On Friday, US Treasury yields, the dollar and oil prices all jumped.
Headed into the jobs report, a succession of soft-ish data fed the view that the economy has turned decisively lower in response to uncertainty and disruptions linked to the Trump administration's trade policies. The whisper number looked for payrolls up 100,000-110,000 for May, below the consensus expectation of 129,000. When the number came in at 139,000, bond yields, equities and commodities prices immediately surged amid short-covering and in a relief trade as it seemed the economy was chugging along nicely -- even though a closer look at the employment report would show signs of cooling over time and narrowing in the sources of job growth.
Big technology shares led the winners despite the rise in bond yields. Tesla, which tanked Thursday, recovered a chunk of its losses on Friday. Other Magnificent Seven shares saw good gains. Leading sectors included airlines, banks, managed care, chain stores and restaurant chains. Lagging were apparel, homebuilders, discount stores and consumer staples including tobacco and grocery stores.
Headed into the jobs report, a succession of soft-ish data fed the view that the economy has turned decisively lower in response to uncertainty and disruptions linked to the Trump administration's trade policies. The whisper number looked for payrolls up 100,000-110,000 for May, below the consensus expectation of 129,000. When the number came in at 139,000, bond yields, equities and commodities prices immediately surged amid short-covering and in a relief trade as it seemed the economy was chugging along nicely -- even though a closer look at the employment report would show signs of cooling over time and narrowing in the sources of job growth.
Big technology shares led the winners despite the rise in bond yields. Tesla, which tanked Thursday, recovered a chunk of its losses on Friday. Other Magnificent Seven shares saw good gains. Leading sectors included airlines, banks, managed care, chain stores and restaurant chains. Lagging were apparel, homebuilders, discount stores and consumer staples including tobacco and grocery stores.
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.
