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US stocks rise even as bond yields jump after strong labor market data

US stocks rise even as bond yields jump after strong labor market data
Traders work on the floor of the New York Stock Exchange (NYSE) on October 20, 2023 in New York City.
Traders work on the floor of the New York Stock Exchange (NYSE) on October 20, 2023 in New York City.

Traders work on the floor of the New York Stock Exchange (NYSE) on October 20, 2023 in New York City.Spencer Platt/Getty Images

  • US stocks rose on Friday as markets digested a strong jobs report that signaled resilience in the economy.

  • Bond yields jumped following the data as it suggested Fed rate cuts may not come soon.

  • But labor market growth is "occurring against a backdrop in which wage growth is moderating," a JPMorgan economist said.

US stocks rose on Friday as markets digested a strong jobs report that tested convictions of imminent rate cuts from the Federal Reserve.

The November data showed 199,000 jobs were added to the US economy, compared to 150,000 in October, while unemployment slipped to 3.7% from 3.9% the month before. Following the release, bond yields jumped, with the yield on the 10-year Treasury clocking in at 4.23%.

While the resilient labor market points to economic strength, calming recession fears, it does suggest that markets may have overestimated how soon the Fed may cut rates.

"The Fed has been stymied by better than expected data releases but as long as inflation continues to edge lower the Fed will likely remain on hold," Quincy Krosby from LPL Financial said. "But if today's report is a harbinger of continued consumer spending the Fed may have to issue a considerably more hawkish message and telegraph that they still cannot declare victory on their campaign to quell inflation."

Meanwhile, JPMorgan's chief US economist thinks that the strong jobs data is not a sign of a protracted fight against inflationary pressures.

"We're seeing, generally speaking cooling in wage pressures," Michael Feroli said in a Global Data Pod podcast episode on Friday. "So one might be concerned that this still resilience in the labor market is creating a problem for inflation, but actually it's occurring against a backdrop in which wage growth is moderating to a more sustainable level."

Here's where US indexes stood as the market closed at 4:00 p.m. on Friday: 

Here's what else is going on:

In commodities, bonds, and crypto: 

Read the original article on Business Insider