Stocks Rise on Jobs Data, Tariff Tensions Easing
Wall Street kicked into risk-on mode again as strong jobs data and signs of a thaw in US-China tensions pushed US stocks and Treasury yields higher.
The S&P 500 gained 1%. A dollar index dropped. The policy-sensitive two-year yield jumped nearly six basis points to 3.76%.
Nonfarm payrolls for April came in above estimates, highlighting a cooling yet resilient labor market. That calmed fears of traders who were worried about the impact Donald Trump’s tariffs would have on the economy.
“This data at first glance is reassuring in that it shows that a recession maybe not just around the corner,” said Karen Georges, an equity fund manager at Ecofi in Paris. “These good numbers are not likely to fuel inflation but this is no game changer for the Fed and Powell. But just for the very short term, these are good numbers for markets, which are still fragile.”
Traders are also cheering developments that indicate tariff tensions are easing. Earlier, China said it’s assessing the possibility of trade talks with the US. A latest report also showed that China has started exempting some US goods from tariffs to soften the blow of the trade war on its own economy.
“It seems we may have reached peak policy uncertainty,” said Kevin Thozet, a member of the investment committee at Carmignac in Paris. “There are talks ongoing, and Trump seems to have watered down some of his policies. If you add in that the earnings season has been fairly positive, the overall backdrop isn’t that bad.”
Still, bond investors have been betting that Trump’s trade policies will slow the US economy and force the Federal Reserve to cut interest rates. Their expectations of a slowdown have been getting repeated reality checks from data showing the economy is remaining resilient so far. Traders now see the Fed lowering rates at least three but as many as four times this year.
The S&P 500 rose 1% as of 9:30 a.m. New York time
The Nasdaq 100 rose 1%
The Dow Jones Industrial Average rose 1%
Source : Bloomberg
