Meta Makes Record Gains – US Market Wrap

– The stock market extended its gains this week as major tech recovered and a strong jobs report improved the outlook for corporate profits.
– The S&P 500 approached 5,000 and the Nasdaq 100 was up about 2% on bullish outlooks from Meta Platforms and Amazon. Economic optimism outweighed bets that the Federal Reserve would not be in a hurry to cut rates. Treasury two-year yields jumped 17 basis points to 4.37%, and the dollar rose to levels not seen since the Fed’s December “pivot.”
– Last month, nonfarm payrolls climbed by 353,000, following upward revisions to the previous two months. The unemployment rate remained at 3.7%, and hourly earnings increased by the highest since March 2022. Separate statistics revealed that US consumer confidence increased substantially.
– While indicators of a healthy economy may continue to augur well for corporate America, the data further strengthens the case that the Fed will postpone the start of its rate decreases.
– Indeed, Treasury yields rose after Friday’s statistics bolstered the case for the Fed to delay rate cuts until at least the second quarter.
– Swap contracts referencing the March Fed meeting date reduced the chances of a quarter-point rate drop in half, to approximately 15%, while the May contract no longer completely priced in a cut, as it had for more than a month.