The New York stock market rose as the U.S. April nonfarm payroll data was assessed to be close to a Goldilocks scenario (an economy that is neither too hot nor too cold).
On the 3rd (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 38,675.68, up 450.02 points (1.18%) from the previous session.
The Standard & Poor's (S&P) 500 index rose 63.59 points (1.26%) to 5,127.79, and the Nasdaq index increased 315.37 points (1.99%) to 16,156.33.
The U.S. April nonfarm payroll data influenced the rise of the three major stock indices. The U.S. Department of Labor announced that nonfarm payrolls increased by 175,000 in April. This was below the expert forecast of a 240,000 increase compiled by The Wall Street Journal (WSJ).
The U.S. unemployment rate for April rose slightly to 3.9% from 3.8% in the previous month. The average hourly wage increased by $0.07 (0.2%) to $34.75. This was below Wall Street's expected 0.3% increase.
Mohamed El-Erian, an advisor to Allianz Group, mentioned on his X (formerly Twitter) account that it was a "Goldilocks U.S. employment report acceptable to both the Federal Reserve (Fed) and the market."
The easing in the labor market supports the possibility of a rate cut that the Fed highlighted at this week's Federal Open Market Committee (FOMC) meeting.
At the FOMC press conference on the 1st (local time), Fed Chair Jerome Powell said, "We are prepared to respond to an unexpected weakening in the labor market," indicating the possibility of a rate cut.
With the easing employment data, the financial market maintained expectations for a rate cut. The 10-year U.S. Treasury yield briefly fell to the 4.44% range before barely holding above 4.50%. The U.S. dollar also weakened.
Osthan Goolsby, president of the Chicago Federal Reserve Bank and considered a dove, also evaluated the April employment report as "very robust."
However, Michelle Bowman, a Fed governor classified as a hawk, stated, "I think inflation will remain elevated for some time," and said she would support rate hikes if inflation slowdown stops or rebounds.
The U.S. services Purchasing Managers' Index (PMI) showed contraction. The Institute for Supply Management (ISM) reported that the PMI for services in April was 49.4.
This is the first time in 1 year and 4 months since December 2022 that the ISM services PMI has shifted into contraction territory.
By stock, Apple surged nearly 6%, contributing to investor sentiment. Wall Street analysts say that due to better-than-expected earnings and share buyback plans, the stock price could surge in the short term. U.S. multinational pharmaceutical company Amgen also saw its stock rise more than 10% intraday after announcing rapid progress in additional trials for obesity treatments planned for the second half of this year.
U.S. electric vehicle company Rivian Automotive rose over 2%. The stock price was driven up by the recruitment of a veteran from Volvo to the executive team ahead of establishing mass production of an affordable 5-seat electric sports utility vehicle (SUV). Nvidia rose over 3% that day, Meta Platforms (Facebook) increased over 2%, and Microsoft also rose over 2%.
Sector indices mostly rose except for energy, including technology, communication, and materials.
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