Stock Market Today: Stocks surge as weak October jobs report extends Treasury market rally, offsetting Apple earnings hit
U.S. stocks are on pace for their best week of the year Friday as a slowdown in October higher, and the highest unemployment rate since January, extends a big Treasury yield pullback on Wall Street.
Updated at 9:41 am EDT
U.S. stocks powered higher Friday as a weaker-than-expected October jobs reported triggered another leg lower in Treasury bond yields and offset the impact of a fiscal-fourth quarter earnings report from Apple AAPL.
The Bureau of Labor Statistics said a new new 150,000 jobs were created in the month of October, down form the downwardly-revised total of 297,000 recorded in September and the three-month average of 266,000.
Average hourly earnings were up just 0.2% from the previous month, the lowest since February of 2022, while the year-on-year gain was pegged at 4.1%, just modestly ahead of the Street consensus forecast but still the slowest pace for 2023.
The headline unemployment rate, meanwhile, nudged to 3.9% from 3.8% following the release, marking the highest level of the year, a level that could support the Federal Reserve's position that a notable labor market slowdown is likely required for it to return inflation to its 2% target and declare the end of its rate hiking cycle.
"Today's report, unlike GDP last week, was a promising sing for the Fed. Wages cooled and, even accounting for the impact of auto strikes, the pace of jobs being added appears to be cooling relative to the beginning of the year," said Vanguard's senior economist Andrew Patterson. "The Fed will want to see more evidence that this labor market cooling represents a trend before they make a decision on any policy changes in December."
The S&P 500, which is one pace for its best week of the year, was marked 27 points, or 0.63%, higher in the opening hour of trading while the Dow Jones Industrial Average indicating a 155 points advance. The tech-focused Nasdaq was marked 71 points higher.
A smaller-than-expected fourth quarter borrowing tally from the Treasury, fading manufacturing activity and falling wage indicators in a series of employment data releases have helped sparked the bond market rally, which began late Wednesday after the Federal Reserve held its key policy rate steady for a second consecutive meeting and indicated that inflation risks were 'balanced' heading into the final months of the year.
Benchmark 10-year Treasury note yields were marked 15 basis points lower at 4.508%, extending the paper's three-day decline to around 50 basis points, while 2-year notes were pegged 10 basis points lower at 4.743%.
The data will likely sooth the impact of Apple's fourth quarter update late Thursday, when the tech giant topped Street forecasts for both its top and bottom lines, but notched its fourth consecutive quarterly revenue decline and hinted at holiday quarter sales growth that would largely flat to last year's levels.
Oil prices were also largely flat in the overnight session, and on pace for another weekly decline, as the supply premium linked to Israel's war with Hamas faded and investors focused on weakening demand from China amid its post-Covid recovery struggles and rising recession risks in Europe.
Brent crude contracts for January delivery, the global pricing benchmark, were last seen trading 43 cents higher on the session at $87.28 per barrel while WTI contracts for December, which are tightly-linked to U.S. gasoline prices, were marked 61 cents higher at $83.07 per barrel.
In overseas markets, the MSCI World Index, the broadest measure of global stocks, in one pace for a 4.3% weekly gain, its best since November of last year, with Europe's Stoxx 600 rising 0.25% on the session in mid-day Frankfurt trading.
Overnight in Asia, the region-wide MSCI ex-Japan benchmark added 0.66% into the close of trading, helped in part by a private reading of services growth in China, the world's second-largest economy, that showed a modest uptick in October activity.
Japan's Nikkei 225, meanwhile, was closed for its annual Culture Day holiday in Tokyo.
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