Friday saw the Dow surge as a weaker-than-expected jobs report fueled hopes for an upcoming Fed rate cut
The Dow Jones Industrial Average closed higher by more than 400 points on Friday, according to CNBC.
This increase followed a softer-than-expected jobs report for April, which raised investor hopes for a potential Federal Reserve rate cut, according to CNBC.
The Dow finished the day up 450.02 points, or 1.18 percent, settling at 38,675.68.
The S&P 500 and Nasdaq Composite also saw significant gains, closing higher by 1.26 percent and 1.99 percent, respectively. This rally marked the best day for the S&P 500 since February, with the index closing at 5,127.79, while the Nasdaq ended the day at 16,156.33.
Contributing to the bullish sentiment, the April nonfarm payrolls report revealed that the US economy added 175,000 jobs, below the 240,000 jobs expected by economists.
This underperformance, coupled with a slight increase in the unemployment rate to 3.9 percent and lower-than-expected wage growth, suggested to investors that the economy might not be overheating, which could give the Fed room to cut interest rates later this year.
Emily Roland, co-chief investment strategist at John Hancock Investment Management, explained that these developments have eased investor fears and revived hopes for rate cuts, which in turn has led to falling rates, rallying bonds, and a boost in equity markets.
Market sentiment was further bolstered by strong quarterly reports from major companies. Apple, for example, saw its shares advance nearly 6 percent after announcing a $110bn share repurchase and exceeding top and bottom-line expectations.
Biotech firm Amgen also contributed to the positive mood, with its stock surging nearly 12 percent following a positive update on an experimental obesity drug.
In addition to individual stock performances, broader market trends also reflected investor optimism.
The information technology sector of the S&P 500 surged 3 percent, led by gains in major tech stocks such as Nvidia, Advanced Micro Devices, Microsoft, and Meta Platforms, each of which gained significantly on the day.
