By Summary
- The U.S. added 254,000 jobs in September, surpassing the estimate of 140,000.
- The dollar hits its highest level since August.
- U.S. 10-year Treasury yield rises, oil prices climb amid concerns over the Middle East.
NEW YORK/LONDON, Oct 4 (AfrikTimes) – MSCI’s global equities index rose on Friday while the dollar climbed to its highest level since mid-August as investors heaved a sigh of relief on news of a surprisingly strong U.S. labor market.
However, oil prices settled higher for a fourth consecutive session as investors braced for a potential Israeli strike on Iranian energy infrastructure.
Earlier on Friday, the U.S. Bureau of Labor Statistics said 254,000 workers were added to nonfarm payrolls last month, above the 140,000 economists had estimated, while August’s data was revised higher, and the 4.1% unemployment rate was lower than expected. U.S. Treasury yields rose to their highest level since early August and traders ditched bets that the Federal Reserve will cut rates by half a percentage point next month after the jobs report.
The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, October 3, 2024. REUTERS.
The Fed is now more likely to lower rates by only a quarter percentage point at its next meeting, said Julia Hermann, global market strategist at New York Life Investments. “U.S. equities reaction to these very strong jobs growth confirms that investors are most concerned about economic growth” even when it comes with a “hawkish disruption,” she said. “The fact the market has been able to digest this hawkish shift points to a constructive view about the economic outlook,” Hermann added, pointing to moves in U.S. Treasuries as well as stocks.
Likely bringing further relief for U.S. economy was the reopening on Friday of U.S. East Coast and Gulf Coast ports after dockworkers and port operators reached a wage deal to settle the industry’s biggest work stoppage in nearly half a century. However, clearing cargo backlog is expected to take time.
Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., September 4, 2024. REUTERS/Brendan McDermid.
At 2:43 p.m. ET on Wall Street, the Dow Jones Industrial Average (.DJI) gained 187.55 points, or 0.45%, reaching 42,199.14. The S&P 500 (.SPX) climbed 29.91 points, or 0.52%, to 5,729.85, while the Nasdaq Composite (.IXIC) advanced 146.19 points, or 0.82%, to 18,064.67.
MSCI’s gauge of stocks across the globe (.MIWD00000PUS) rose 2.63 points, or 0.31%, to 844.93. Earlier, Europe’s STOXX 600 (.STOXX) index saw a 0.44% rise.
Investors remained anxious about how Israel would respond after Iran fired missiles at it on Tuesday. Supreme Leader Ayatollah Ali Khamenei said earlier that Iran and its regional allies will not back down. But oil prices had pared gains after U.S. President Joe Biden said that, in Israel’s shoes, he would consider alternatives to striking Iranian oil fields and that he thinks Israel has not decided yet how to respond.
U.S. crude prices settled 0.9% higher at $74.38 per barrel, while Brent crude finished at $78.05, up 0.55% for the day.
Bull statues are placed in font of screens showing the Hang Seng stock index and stock prices outside Exchange Square, in Hong Kong, China, August 18, 2023. REUTERS/Tyrone Siu.
In the currency market, the dollar jumped to a seven-week high on Friday and was eyeing its biggest weekly gain since September 2022 after the jobs report led traders to cut their bets on a big Federal Reserve rate cut. And based on its gains for the full week, New York Life’s Julia Hermann said the dollar’s strength throughout the week was also a reaction to heightened geopolitical risks.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.62% to 102.54. The euro was down 0.57% to $1.0968, while the dollar strengthened against the Japanese yen by 1.27% to 148.79.
In the bond market, the yield on the benchmark U.S. 10-year Treasury note increased by 12.1 basis points to 3.971%, up from 3.85% late Thursday. The 30-year bond yield also climbed, gaining 7.9 basis points to 4.259%. The 2-year note yield, often tied to interest rate expectations, rose 20.4 basis points to 3.9176%, from 3.714%.
A closely watched part of the U.S. Treasury yield curve, which measures the gap between 2-year and 10-year note yields and is seen as an indicator of economic expectations, stood at a positive 5.1 basis points.
In precious metals, spot gold fell 0.33% to $2,647.12 an ounce, while U.S. gold futures fell 0.38% to $2,647.10 an ounce.
