Tech-heavy Nasdaq Composite rose nearly 0.80% to 12,087, and the S&P 500 index soared 0.36%, on Thursday ahead of a three-day weekend due to the Good Friday that will also bring a crucial U.S. jobs report later the day, which will help determine the path ahead for the Federal Reserve.
Despite Thursday’s gains, Nasdaq ended this week down just over 1%, the S&P 500 also inched lower by 0.1% on the week, posting its first losing week in four, while Dow Jones was the only major index that ended with a positive mark of 0.6%, as investors weighed recession fears and lower-than-expected U.S. economic data with expectations for a reverse in Fed’s tightening policy campaign.
Based on the above, investors will be closely monitoring March U.S. NFP- nonfarm payroll report due later on the day for further signs on whether Fed’s aggressive rate hike monetary policy has started cooling down the labor market and slowing down the economy.
In February, the Nonfarm payrolls rose by 311,000, well above the market’s expectation. The unemployment rate also increased above expectations to 3.6%, a sign that the U.S. employment market was still hot, despite the Fed’s efforts to slow the economy and bring down inflation.
The labor market data likely keep the Fed on track to raise interest rates when it meets again May 02-03 (50-50 chance of another rate hike of 25 bps) with investors looking for weaker labor force readings in the hope that it could push the Fed to change course on its interest rate hiking campaign to curb inflation.
Adding to the above, St. Louis Federal Reserve President James Bullard said yesterday he doesn’t see inflationary pressures going away soon, and it's going to be difficult for Fed to get inflation back down to its 2% target soon.
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