US Stocks Rally Toward Record Levels on Robust Jobs Report
US equity markets advanced significantly on Wednesday, edging closer to historic peaks, following the release of unexpectedly positive unemployment data. This development bolstered investor confidence in the underlying strength and resilience of the American economy, according to reports from the Associated Press.
Market Indices Show Broad-Based Gains
The benchmark S&P 500 index rose by 0.5%, trading just shy of the all-time high it established in late last month. Similarly, the Dow Jones Industrial Average increased by 222 points, equivalent to a 0.4% gain, while the technology-heavy Nasdaq Composite also climbed 0.5% as of 9:35 AM Eastern Time.
This upward momentum was primarily fueled by a report from the US Labor Department, which indicated that employers added 130,000 jobs in the previous month. This figure substantially surpassed economists' expectations of 75,000 new positions. Consequently, Treasury yields experienced a concurrent climb, reflecting renewed optimism in economic prospects.
Detailed Jobs Data and Economic Implications
The stronger-than-anticipated jobs data helped alleviate concerns that had emerged just a day earlier, triggered by a separate report suggesting a potential slowdown in US household spending. However, the Labor Department's report also included revisions, revealing that employers added only 181,000 jobs for the entirety of the last year. This marked a sharp decline from the previously reported 584,000 and represented the weakest annual performance since 2020, when the COVID-19 pandemic severely disrupted economic activity.
"We all anticipated there would be downward revisions, but these figures were better than expected," commented Brian Jacobsen, Chief Economic Strategist at Annex Wealth Management.
In the equity markets, energy and industrial stocks led the gains within the S&P 500, signaling optimism around heightened economic activity. Notable performers included Caterpillar, which surged 3.9%, and Exxon Mobil, which gained 2.4%.
Notable Declines Amidst Overall Market Strength
Despite the broad market advance, several individual stocks faced significant declines. Moderna plummeted 10.5% after announcing that the US Food and Drug Administration (FDA) is refusing to consider its application for a new influenza vaccine developed using mRNA technology. This decision reflects increased regulatory scrutiny of vaccines under the leadership of Health Secretary Robert F Kennedy Jr.
Robinhood Markets dropped 11%, even though it reported quarterly profits that exceeded expectations. The decline was attributed to revenue figures missing forecasts, with analysts expressing concerns about rising expenses projected for 2026 and weak cryptocurrency trading volumes.
Kraft Heinz declined 4.1% despite posting better-than-expected quarterly results. CEO Steve Cahillane stated that the company is pausing plans to split into two separate businesses. Instead, it will invest $600 million in marketing, sales, and research and development initiatives aimed at restoring growth.
Bond Market Movements and Federal Reserve Outlook
In the bond market, the yield on the 10-year Treasury note rose to 4.17% from 4.16% late Tuesday, while the two-year Treasury yield increased to 3.51% from 3.45%. The robust jobs data prompted traders to adjust their expectations regarding the number of interest rate cuts by the US Federal Reserve this year. According to data from CME Group, most market participants still anticipate at least two rate reductions, though the scale of expected cuts has been moderated.
The Federal Reserve has currently paused its rate-cutting cycle. However, a weaker labor market scenario could have accelerated monetary easing measures. The next critical data point for financial markets will be the US consumer inflation figures scheduled for release on Friday.
Global Market Performance
Globally, stock markets exhibited mostly positive trends. South Korea's Kospi index rose by 1%, while the United Kingdom's FTSE 100 gained 0.9%, indicating a synchronized uptick in investor sentiment across major economies.
