NEW YORK — Stocks posted solid gains on Wall Street as a strong report on employment showed the U.S. economy continues to chug along. The S&P 500 rose 1.1% Friday. The Dow Jones Industrial Average rose 307 points and the Nasdaq composite rose 1.2%. U.S. employers added a surprisingly strong number of jobs in March, while modest gains in wages eased some fears of a renewed spike in inflation. Wall Street is still betting the Federal Reserve will start cutting interest rates in June. Treasury yields rose in the bond market. Oil rose slightly and gold prices continued their recent rally,
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
Stocks rose on Wall Street and Treasury yields climbed Friday following a hot U.S. jobs report.
The S&P 500 rose 0.9%, trimming some of its losses for the week and moving closer to its record high set last week. The Dow Jones Industrial Average gained 279 points, or 0.7% as of 2:51 p.m. Eastern. The Nasdaq composite rose 1.1%.
Technology companies led that march higher. Chipmaking giant Nvidia rose 2.1% and Google's parent company, Alphabet, rose 1.1%. The gains were broad, with every sector in the benchmark S&P 500 rising, though the index is still on track for its first weekly loss in three weeks.
U.S. employers added a surprisingly strong 303,000 workers to their payrolls in March, according to a government report on Friday. The strong job market has helped fuel consumer spending and earnings growth for businesses, amounting to strong economic growth overall.
The robust job market has also sparked concerns about inflation creeping higher, which could delay any rate cuts by the Federal Reserve. However, Friday’s report showed that wages rose a modest 0.3% for the month, which puts less upward pressure on inflation, and Wall Street still expects the Fed to begin cutting rates in June.
Friday's gains follow a late-day slump on Thursday for major indexes after a Federal Reserve official unsettled investors by questioning whether the central bank needs to cut rates at all this year amid a strong economy. A series of reports recently have shown that the U.S. economy remains resilient despite elevated inflation levels and high interest rates.
Treasury yields climbed following the jobs report. The yield on the 10-year Treasury rose to 4.37% from 4.31% just before the report was released. The two-year yield, which moves more on expectations for the Fed, rose to 4.73% from 4.65% just prior to the report.
The bond market may be signaling concern about interest rates staying higher for longer, but the stock market seems to be accepting the strong jobs report as good news, with consumer spending and corporate profits remaining important for investors.
“As long as the market gets one or two cuts and the Fed doesn't leave rates unchanged, that's good enough for equity investors,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance.
The Fed's benchmark interest rate remains at its highest level in two decades as a result of historic rate hikes meant to tame inflation. The strategy has seemingly worked so far, with overall consumer prices falling drastically from a peak in 2022. Inflation fell to a rate of 3.2% in February. It was as a high as 9.1% in the middle of 2022.
Strong employment and consumer spending have raised concerns that inflation will be increasingly difficult to cool to the Fed's target rate of 2%. They also raise the potential for inflation to reheat.
The Fed and investors will get another key update on inflation next week when the government releases its March report on consumer prices.
Wall Street has a slightly better than even bet that the Fed will trim rates at its June meeting, according to CME's FedWatch Tool. That's down from 65.9% on Thursday and 72% a month ago.
The market was mostly quiet elsewhere with the latest round of corporate earnings set to heat up in the next few weeks.
Johnson & Johnson was mostly unchanged after the pharmaceutical giant said it was buying the medical technology company Shockwave in a deal worth about $13 billion.
Apple edged up 0.4% after announcing that it is laying off more than 600 workers in California, marking its first big wave of post-pandemic job cuts amid a broader wave of tech industry consolidation. The tech sector has been slashing workforces for two years, but the actions have had little impact on the broader employment market.
In energy markets, the price of U.S. crude oil settled 0.4% higher. It's up just over 20% so far this year as demand remains robust.
Markets in Europe and Asia fell.
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AP Business Writers Yuri Kageyama and Matt Ott contributed to this report.
Damian J. Troise And Alex Veiga, The Associated Press
