US Futures Rise, Bonds Slide on Solid Jobs Data: Markets Wrap
London, UK - US futures climbed and bond prices slid on Friday as a strong jobs report boosted optimism about the US economy. The gains came despite concerns about rising inflation and higher interest rates.
As of 9:00 a.m. GMT, futures on the S&P 500 rose 0.4%, while Dow futures gained 0.5%. The tech-heavy Nasdaq 100 futures also rose 0.4%.
Investors were reacting to the US Labor Department's latest employment report, which showed that the economy added 559,000 jobs in March, beating expectations. The unemployment rate fell to 6%, down from 6.2% in February.
"The jobs report was strong across the board, with solid gains in a wide range of sectors," said John Smith, a market analyst at London-based investment firm ABC Capital. "This suggests that the US economy is recovering faster than expected from the pandemic."
However, the positive news on jobs also raised concerns about inflation and interest rates. The report showed that average hourly earnings rose by 0.3% in March, and by 4.2% over the past 12 months. This was the largest 12-month increase in over a decade.
"Higher wages could lead to higher inflation, which could force the Federal Reserve to raise interest rates sooner than expected," warned Smith.
As a result, bond prices fell on Friday, with the yield on the benchmark 10-year Treasury note rising to 1.68%, up from 1.64% on Thursday. Higher bond yields can signal expectations of higher inflation and interest rates.
Despite the concerns, some analysts remain optimistic about the US stock market.
"The jobs report was a positive surprise, and it's encouraging to see the US economy continuing to recover," said Sarah Jones, chief investment officer at London-based investment firm XYZ Capital. "We believe that stocks will continue to perform well in the coming months, as the economy reopens and consumer spending picks up."
In other markets, European stocks also rose on Friday, with the pan-European STOXX 600 index up 0.3% in early trading. Asian stocks were mixed, with Japan's Nikkei 225 index closing 0.2% lower, while China's Shanghai Composite index gained 0.2%.
Overall, Friday's market moves suggest that investors are cautiously optimistic about the global economic recovery, but remain wary of potential risks such as inflation and interest rate hikes.
