Thursday's sharp reversal lower for stocks was old news Friday with the main indexes soaring after the March jobs report. The volatility could continue next week, too, with several key events on the horizon.
It's a little confusing as to why stocks rallied today considering this morning's data from the Bureau of Labor Statistics showed the U.S. added 303,000 new jobs in March – well above economists' expectations for 200,000. Additionally, the unemployment rate edged down to 3.8% from 3.9%.
One positive data point helping support calls for the Fed to start cutting interest rates was that average hourly earnings – a measure of inflation – rose at their slowest annual rate since June 2021. Still, the 0.3% month-over-month rise in wages was quicker than the 0.1% increase seen in February.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
What's more, yields on both the 2-year and 10-year Treasury yields spiked to the high end of their year-to-date ranges as expectations for a June rate cut dropped (to a 51% chance vs yesterday's 59%, according to CME Group's FedWatch Tool).
Putting all these pieces together would make one assume stocks would extend Thursday's late-day selloff. Yet, at Friday's close, the Dow Jones Industrial Average was up 0.8% at 38,904, the S&P 500 was 1.1% higher at 5,204, and the Nasdaq Composite had jumped 1.2% to 16,248.
"This morning's blowout jobs numbers show that the economy isn't showing any signs of slowing down and consumer spending should be able to hold up in the near term," says Chris Zaccarelli, chief investment officer for Independent Advisor Alliance. While this could be bad for the bond market, stocks can continue to move higher if investors place more importance on strong consumer spending and corporate profits than on the Fed's rate-cut plans, he adds.
Snowflake upgraded to Buy
In single-stock news, Snowflake (SNOW) rose 1.7% after Rosenblatt Securities analyst Blair Abernethy upgraded the tech stock to Buy from Neutral (the equivalent of Hold). The analyst says solid IT spending, accelerating digital transformation trends and a "strong first-quarter performance from the leading cloud service providers" have Snowflake in a position to beat Q1 product revenue growth estimates.
Shares of SNOW – which happens to be a member of the Berkshire Hathaway equity portfolio – have been spiraling since late February when the company announced the departure of its CEO. Analysts remain bullish, though, as evidenced by a consensus Buy recommendation, according to S&P Global Market Intelligence.
Tesla drops on low-cost car reports
Tesla (TSLA), meanwhile, fell 3.6% after a Reuters report suggested the electric vehicle maker is scrapping plans for a low-cost car.
The company has yet to formally comment on the speculation, although in a post on X, his social media platform, Tesla CEO Elon Musk wrote "Reuters is lying (again)."
CPI and earnings season on deck
Looking ahead, there are a few things investors will be paying close attention to next week. One is oil prices. Crude futures are up nearly 22% for the year to date, which "threatens the 'inflation is falling' narrative and has driven expectations higher," says Liz Young, head of investment strategy at SoFi.
Inflation will be front and center on next week's economic calendar, with the March Consumer Price Index (CPI) set for release Wednesday morning.
And finally there's earnings season. While next week's earnings calendar is relatively light, Friday's results from several big banks, including JPMorgan Chase (JPM), mark the start of the first-quarter reporting season.
Related content
- Bank of America Gets Downgraded Ahead of Earnings
- TIPS vs I-Bonds
- How Interest Rates Impact Stock Prices
-
Are Buffett and Berkshire About to Bail on Kraft Heinz Stock?Warren Buffett and Berkshire Hathaway own a lot of Kraft Heinz stock, so what happens when they decide to sell KHC?
-
Social Security Will Continue Sending Paper Checks Sparingly, Reversing CourseThe Social Security Administration has backed off from plans to eliminate paper checks. However, it will only send checks in the mail as a matter of last resort.
-
Are Buffett and Berkshire About to Bail on Kraft Heinz Stock?
Warren Buffett and Berkshire Hathaway own a lot of Kraft Heinz stock, so what happens when they decide to sell KHC?
-
How Divorced Retirees Can Maximize Their Social Security Benefits: A Case StudySusan discovered several years after she filed for Social Security that she is eligible to receive benefits based on her ex-spouse's earnings record. This case study explains how her new benefits are calculated and what her steps are to claim some of the money she missed.
-
From Piggy Banks to Portfolios: A Financial Planner's Guide to Talking to Your Kids About Money at Every AgeFrom toddlers to young adults, all kids can benefit from open conversations with their parents about spending and saving. Here's what to talk about — and when.
-
I'm an Investment Pro: Here's How Alternatives Could Inject Stability and Growth Into Your PortfolioAlternative investments can often avoid the impact of volatility, counterbalancing the ups and downs of stocks and bonds during times of market stress.
-
Dow Bleeds Red Due to Big Blue: Stock Market TodaySix of the official GICS sectors were in the green, led by communications services, technology and energy stocks.
-
July Fed Meeting: Live Updates and CommentaryThe July Fed meeting could be a lively economic event, with Wall Street keyed into what Fed Chair Powell has to say about interest rates and President Trump.
-
A Contrarian Approach Pays Off for This Small-Cap FundSmall-cap stocks have been hit hard by tariff worries, but this T. Rowe Price fund has outperformed thanks to its manager's against-the-tide approach.
-
A Financial Planner's Guide to Unlocking the Power of a 529 Plan529 plans are still the gold standard for saving for college, especially for affluent families, though they are most effective when combined with other financial tools for a comprehensive strategy.
