S&P 500 futures and Treasury yields rise Friday as March jobs report shows robust economy

S&P 500 futures and Treasury yields rose on Friday during a holiday-shortened trading session after the March jobs report showed a resilient economy and moderate inflation.

S&P 500 futures rose 0.2 percent. Futures on the Dow Jones Industrial Average gained 55 points. However, Nasdaq 100 futures were flat.

The 2-year government yield jumped 10 basis points to 3.93%. The 10-year government yield yielded 8 basis points to 3.37%. (One basis point equals 0.01% and returns move inversely to prices.)

The US added 236,000 jobs in March, roughly in line with expectations, with the unemployment rate falling to 3.5% from 3.6% a month earlier. Expectations were for a 238,000 increase in nonfarm payrolls, based on the consensus estimate of Dow Jones economists. The same economists expected unemployment to remain stable at 3.6%.

Average hourly earnings rose 4.2% on a 12-month basis, the lowest level since June 2021.

The New York Stock Exchange is closed on Good Friday, so normal trading doesn’t start until Monday. Futures and bond trading closes early on Friday.

The S&P 500 lost 0.1% for the week ended Thursday, snapping a 3-week winning streak as a series of weak labor data points suggested to investors that a recession may be near. The Nasdaq Composite fell 1.1% for the week, while the Dow index managed a small rise.

Earlier this week, ADP said private payrolls slowed significantly in March, Labor Department data showed job vacancies fell to their lowest in nearly two years and weekly jobless claims came in higher than expected.

Friday’s jobs report contradicts the weak data and is likely to divide investors. Some may like the resilient economy, while others may not mind a little weakening in the labor market to get the Federal Reserve to back off its ongoing tightening campaign. The Fed’s next decision on interest rates is May 3.

March’s jobs report “offered an update on the employment situation that paves the way for the FOMC to raise another quarter point in May if next week’s CPI release warrants it,” wrote Ian Lyngen, head of U.S. interest rate strategy at BMO Capital Markets.

The consumer price index for March will be released on Wednesday.