The S&P 500 and other major US stock indexes rose on Friday. This led the S&P 500 to achieve its longest winning streak since 2004. The Dow closed higher by 564 points, or 1.39%.
The S&P 500 increased by 1.47%. The Nasdaq Composite gained 1.51%. This marks the ninth consecutive daily gain for both the Dow and the S&P 500.
The stock market rally gained momentum after a Labor Department report. It showed the economy added 177,000 jobs in April. This outperformed expectations of around 135,000 jobs.
“Markets breathed a sigh of relief this morning as the jobs data came in better than expected,” said Chris Zaccarelli, chief investment officer at Northlight Asset Management. Investor sentiment was further buoyed by a softer tone from President Donald Trump on the US-China trade war. There were also hints from White House officials about potential trade deals with other countries, including India.
On Friday, a report suggested that China is considering how to address US concerns about its role in the international fentanyl trade.
Stock rally buoyed by strong data
A spokesperson for China’s Commerce Ministry acknowledged that China is open to proposals from the US to begin trade talks.
This marked a subtle but significant shift in tone that might pave the way for negotiations. While the strong jobs data indicated a robust labor market, investors remain focused on trade negotiations and upcoming data releases to assess the impact of tariffs. “The labor market remained on solid footing through mid-April, although this timing likely precedes any forthcoming impacts from trade policy uncertainty,” noted David Doyle, head of economics at Macquarie.
Policy uncertainty persists as traders adjust their expectations regarding Federal Reserve actions. After the jobs report, market participants dialed back their expectations of a Fed rate cut in June. According to the CME FedWatch tool, traders now foresee a 36.6% chance of a rate cut in June, down from 55% the previous day.
“This report buys the Fed more time to focus on the inflation mandate,” said Gina Bolvin, president of Bolvin Wealth Management Group. Tech stocks also played a significant role in the market’s gains. Strong earnings reports from Meta and Microsoft reassured investors about the resilience of Big Tech companies, particularly their focus on artificial intelligence.
Meta shares rose 4.2% on Thursday and 4.3% on Friday. Microsoft shares saw a 7.6% increase on Thursday and a further 2.3% rise on Friday. If the S&P 500 closes higher again on Monday, it will mark the first 10-day winning streak for the index since the 1990s, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.
