Wall Street extended its rally on Thursday (Friday AEST), with the S&P 500 and Nasdaq Composite closing at fresh record highs, after a stronger-than-expected June jobs report bolstered confidence in the United States economy's resilience.
The Dow Jones Industrial Average climbed 344.1 points, or 0.8%, to finish at 44,828.5. The S&P 500 rose 52 points, or 0.8%, to end at 6,279.4, while the Nasdaq advanced 208 points, or 1%, to 20,601.1.
Investor sentiment was lifted by the latest nonfarm payrolls data, which showed that U.S. employers added 147,000 jobs in June, well ahead of the 110,000 consensus estimate. May’s figure was also revised higher to 144,000.
Meanwhile, the unemployment rate fell to 4.1%, defying forecasts for an uptick to 4.3%.
The upside surprise in employment data sparked a rally in Treasury yields and dampened market expectations for near-term interest rate cuts from the Federal Reserve.
Traders now see a 95.3% probability the Fed will hold rates steady at its upcoming July policy meeting, according to the CME Group FedWatch Tool.
Thursday’s employment print came just a day after ADP’s report showed a decline of 33,000 in private payrolls, briefly stoking concerns about economic softness amid shifting trade and tax policies.
Market attention also remains focused on President Donald Trump’s ongoing trade negotiations. Following the announcement of a new U.S.-Vietnam trade deal on Wednesday, investors are watching for further developments as the president’s 90-day tariff pause deadline draws nearer.
Meanwhile, Trump’s sweeping tax reform package continues to make headway. The legislation, which passed the Senate earlier in the week, was advanced by the Republican-led House on Thursday and now awaits a final vote.
U.S. equity markets operated on a shortened schedule Thursday, closing early ahead of the Independence Day holiday. Markets will remain shut on Friday.
All three major indices ended the holiday-shortened week in positive territory. The S&P 500 and Nasdaq Composite rose 1.7% and 1.6%, respectively, over the week, while the Dow outperformed with a 2.3% gain.
In the bond market, yields surged in response to labour data. The yield on the 10-year Treasury note climbed to 4.348%, while the 2-year yield jumped to 3.886%, rising by 1.5% and 2.5%, respectively.
