Wall Street rallies to new highs as hiring beats expectations
U.S. stocks soared to fresh record levels Thursday after a stronger-than-expected jobs report calmed recession worries and boosted confidence in the resilience of the American economy. The S&P 500 gained 0.8%, hitting an all-time high for the fourth time in five trading days. The Dow Jones Industrial Average added 344 points, or 0.8%, and the Nasdaq Composite rose 1%.
Hiring data released by the U.S. government showed employers added 147,000 jobs last month, surpassing forecasts and signaling continued economic momentum despite concerns surrounding President Donald Trump’s tariff policies. The unemployment rate declined to 4.1%.
“You cannot find any evidence of a nascent recession in these figures,” said Carl Weinberg, chief economist at High Frequency Economics.
Bond yields jump as Fed rate cuts look unlikely
The upbeat labor data caused Treasury yields to climb, as traders dialed back expectations of a rate cut from the Federal Reserve. The 10-year Treasury yield rose to 4.34% from 4.30%, while the 2-year yield jumped to 3.88% from 3.78%.
Traders now see less than a 5% chance of a rate cut at the Fed’s upcoming meeting, sharply down from 24% just a day earlier, according to CME Group’s FedWatch tool. Fed Chair Jerome Powell has maintained a cautious stance, citing the need to evaluate the inflationary effects of Trump’s pending tariffs.
Travel, banks, and tech stocks outperform
Confidence-sensitive sectors led Thursday’s rally. Expedia rose 3.2%, Norwegian Cruise Line climbed 2.9%, and banks like Citigroup and JPMorgan Chase advanced 2.3% and 1.9%, respectively. Datadog shares surged 14.9% after being named to replace Juniper Networks in the S&P 500 index, attracting passive fund inflows.
On the downside, high interest rates weighed on homebuilders. Lennar dropped 4.1% and D.R. Horton fell 2.7%, as elevated mortgage rates continue to challenge housing affordability.
Tariff uncertainty lingers despite market optimism
Though Thursday’s data eased fears of a sharp downturn, uncertainty surrounding trade policy remains. Many of Trump’s tariffs are paused but could go into effect next week if deals aren’t reached. Some businesses reported inflation pressures related to tariffs in the latest ISM survey, particularly in agriculture and manufacturing sectors.
Elsewhere, fewer Americans filed for jobless benefits last week, reinforcing signs of labor market strength. Overseas, South Korea’s Kospi gained 1.3%, while Hong Kong’s Hang Seng slipped 0.6%. European markets were broadly higher.
