For markets that was a welcome sign that the Federal Reserve’s efforts to fight inflation by slowing the economy with high interest rates might be making some progress. The S&P 500 rose 1.3% Friday, its biggest gain since February. The Dow Jones Industrial Average rose 1.2%. and the Nasdaq composite climbed 2%. U.S. employers added 175,000 jobs last month, down sharply from a big increase in March. Apple jumped after announcing a mammoth $110 billion stock buyback.
“The demand for labor is slowing, which will eventually ease inflation pressures, giving the Fed some leeway to cut rates later this year,” said Jeffrey Roach, chief economist for LPL Financial. “Slower payroll growth and fewer hours worked imply the economy is slowing at a measured pace. This jobs report is consistent with the soft landing narrative.”
Stubbornly high readings on inflation this year pushed Federal Reserve Chair Jerome Powell to say on Wednesday that it will likely take “longer than previously expected” to get enough confidence about inflation to cut interest rates. The benchmark S&P 500 fell 4.2% in April, its first monthly loss since October, as signals of stubbornly high inflation forced traders to ratchet back expectations for when the Fed could begin easing interest rates.
Amgen climbed 12.4% after the biotechnology company gave investors an encouraging update on a potential obesity drug. Live Nation Entertainment added 7.6% after the ticket seller and concert promoter beat analysts’ first-quarter revenue forecasts.
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