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US stocks saw a significant rally on Friday, recovering from losses incurred after Donald Trump’s tariff announcement a month ago, following better-than-expected labor market data.
In April, 177,000 jobs were added, surpassing the 135,000 predicted by economists. Despite this, the number was lower than March’s figures.
The S&P 500 surged 1.5% on Friday, reaching levels above those seen on April 2 when Trump unveiled his tariff plans. This marked the index’s ninth consecutive daily gain, the longest winning streak since 2004.
Global equities have shown signs of recovery, with the S&P 500 bouncing back from a 15% drop post-tariff announcement. Comments from China’s commerce ministry hinting at trade discussions with the US have also contributed to market optimism.
Wall Street’s rebound has been mirrored in other regions, with Asia-Pacific and European indices posting multi-day gains. The UK’s FTSE 100, in particular, enjoyed a 1.2% increase on Friday, extending its winning streak to 15 sessions.
Despite the market recovery, the dollar remains below its pre-tariff levels by almost 4%.
Following the positive jobs data on Friday, the yield on two-year Treasuries rose, reflecting investor expectations of sustained higher borrowing costs by the Federal Reserve.
Traders now anticipate fewer interest rate cuts this year, with Goldman Sachs pushing back its expected rate cut from June to July.
President Trump called for a rate cut on his social media platform, praising the strong employment numbers. The data also revealed a decline in federal government employment, with 9,000 job losses in April and 26,000 since January.
In addition to the April job figures, March’s numbers were revised down. The unemployment rate remained steady at 4.2%.
Economists suggest that Trump’s economic policies, while impactful, may take time to fully materialize. They anticipate a drag on growth in the second quarter due to the imposed tariffs.
Overall, the labor market remains stable, but uncertainty lingers amid ongoing trade tensions. Investors are cautious as they await further developments.
Additional reporting by Ian Smith in London