Following a report that indicated the U.S. labor situation appears to be stronger than Wall Street anticipated, Manila stocks are continuing to rise to all-time highs on Thursday.
In morning trade, the S&P 500 was up 0.7% and headed for its fourth consecutive five-day high. As of 10:15 a.m. Eastern time, the Nasdaq composite was up 0.9% and the Dow Jones Industrial Average was up 387 points, or 0.6%.
Leading the way were stocks of businesses, such as travel agencies, whose earnings can increase the most when employees feel secure. Norwegian Cruise Line surged 2.6% higher, Expedia jumped 3.6%, and United Airlines increased 2.8%.
Strong bank stocks included JPMorgan Chase up 1.3% and Wells Fargo up 1.8%.
When the U.S. government reported that employers added 147,000 more jobs to their payrolls last month than they lost, the bond market reacted more strongly. Despite concerns that President Donald Trump’s tariffs may harm the economy and inflation, the unexpected hiring surge shows that the U.S. job market is holding up.
Carl Weinberg, chief economist of High Frequency Economics, says there is nothing to be unhappy about. These numbers don’t show any signs of a developing recession.
According to a different survey, however, fewer American workers filed for unemployment insurance last week, suggesting that layoffs may be slowing down.
Bond market yields surged as investors wagered that the better-than-expected statistics may prevent the Federal Reserve from lowering interest rates, as Trump has been adamantly demanding. In addition to making borrowing more costly for individuals and businesses wishing to purchase a car or a fleet of equipment, higher interest rates can drive down the price of stocks and other investments.
The likelihood that the Fed would lower its main interest rate at its next meeting later this month is now less than 7%, according to futures market traders. According to data from CME Group, that is a significant decrease from the approximately 24% chance they observed only one day prior.
Jerome Powell, the chair of the Fed, has been adamant that before taking any further action, he wants to wait and observe how Trump’s tariffs impact inflation and the economy. Lower rates stimulate the economy, but they can also increase inflation. And if Trump’s tariffs are set to raise inflation, that might be risky.
Unless Trump strikes agreements with other nations to reduce them, several of his high projected import levies are now on hold but are set to go into force next week.
According to the Institute for Supply Management’s most recent study, many U.S. companies in the services sector continue to express anxiety about the effects of tariffs, despite the fact that they resumed growth last month after May’s decline.
According to a poll, “cost increases are being impacted by increased tariff costs and the possibility of tariffs,” one business in the forestry, fishing, hunting, and agriculture sectors stated.
Late Wednesday, the yield on the 10-year Treasury increased from 4.30% to 4.34%. The yield on the two-year Treasury, which is more sensitive to Fed predictions, increased even further. It increased from 3.78% to 3.88%.
Before trading starts on Wednesday, Datadog’s stock will enter the closely watched S&P 500 index, which caused it to rise 11.7% on Wall Street. Investment in any stock that joins the index is encouraged by the fact that many fund managers either directly imitate the S&P 500 or at the very least compare themselves to it.
Juniper Networks, which merged with Hewlett Packard Enterprise, will be replaced by Datadog.
Companies that suffer from high interest rates were on the losing side of Wall Street.
Lennar fell 2.1%, and homebuilders want rates to lower to make mortgages more affordable.
Businesses that own real estate also suffered; Crown Castle, which owns cell towers and other communications infrastructure, saw a 1.6% decline.
Indexes in foreign stock markets increased across most of Asia and Europe. Two of the most significant movements were the 1.3% increase in South Korea’s Kospi and the 0.6% decline in Hong Kong’s Hang Seng.
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AP Contributions were made by authors Teresa Cerojano and Matt Ott.
