Nasdaq scores sixth straight week of gains in longest win streak since January 2020
U.S. stocks jumped Friday, with the Dow Jones Industrial Average closing up 701 points, after the May jobs report showed the labor market is in surprisingly strong shape despite the Federal Reserve’s aggressive tightening of monetary policy in the past year.
How did stocks trade?
- The Dow Jones Industrial Average DJIA, +2.12% jumped 701.19 points, or 2.1%, to close at 33,762.76.
- The S&P 500 SPX, +1.45% gained 61.35 points, or 1.5%, to finish at 4,282.37.
- The Nasdaq Composite COMP, +1.07% rose 139.78 points, or 1.1%, to end at 13,240.77.
For the week, the Dow climbed 2%, the S&P 500 increased 1.8% and the Nasdaq advanced 2%. The S&P 500 booked a third straight week of gains while the tech-heavy Nasdaq rose for a sixth straight week in its longest winning streak since January 2020, according to Dow Jones Market Data.
What drove markets?
Many investors are now anticipating the Federal Reserve might pause its interest rate hikes this month, despite the stronger-than-expected job gains in May, as the labor market report also showed that the unemployment rate rose to 3.7% and hourly earnings growth matched consensus forecasts, according to Vendig.
Average hourly earnings rose 0.3% in May. The increase being in line with expectations helped assuage investors’ fears that wage growth spiraling out of control would fuel high and sticky inflation, he said.
“What I’m optimistically hoping for is they take a pause,” Vendig said of the Fed’s rate hikes. That would give “more time for their policies to play out,” he said, citing “lag effects” from the central bank’s tightening of monetary policy over the past year in its bid to tame high inflation.
Meanwhile, the Dow Jones Industrial Average on Friday saw its biggest daily gain in points since the end of November, according to Dow Jones Market Data. The index’s percentage increase on Friday was the largest since Jan. 6.
Stocks climbed sharply Friday, as investors cheered the Senate passing the debt-ceiling bill Thursday night while weighing the U.S. government’s latest monthly employment report.
The Bureau of Labor Statistics report Friday showed the U.S. economy added 339,000 jobs in May, far surpassing Wall Street expectations for 190,000. The number of jobs created in March and April was also revised higher by roughly 93,000 combined.
The employment report pointed to a resilient economy, possibly leading some investors to believe a recession is further away than previously thought, said Brian Vendig, president at MJP Wealth Advisors, in a phone interview Friday. That, along with the debt-ceiling bill being passed by the Senate, appeared to lift stocks Friday, he said.
Many investors are now anticipating the Federal Reserve might pause its interest rate hikes this month, despite the stronger-than-expected job gains in May, as the labor market report also showed that the unemployment rate rose to 3.7% and hourly earnings growth matched consensus forecasts, according to Vendig.
Average hourly earnings rose 0.3% in May. The increase being in line with expectations helped assuage investors’ fears that wage growth spiraling out of control would fuel high and sticky inflation, he said.
“What I’m optimistically hoping for is they take a pause,” Vendig said of the Fed’s rate hikes. That would give “more time for their policies to play out,” he said, citing “lag effects” from the central bank’s tightening of monetary policy over the past year in its bid to tame high inflation.
Meanwhile, the Dow Jones Industrial Average on Friday saw its biggest daily gain in points since the end of November, according to Dow Jones Market Data. The index’s percentage increase on Friday was the largest since Jan. 6.