U.S. stocks rallied Friday to end the week with large gains on the heels of a solid February jobs report where strong jobs growth coupled with a deceleration in wage gains to foster economic growth optimism and alleviate some resurfaced inflation concerns. Geopolitical tensions eased a bit in the wake of President Trump’s agreement to meet with North Korean leader Kim Jong Un and concerns surrounding the recently signed steel and aluminum tariffs have, at least for the moment, subsided somewhat. Treasury yields gained ground and the U.S. dollar dipped. Crude oil prices rallied and gold ticked higher.

The Dow Jones Industrial Average (DJIA) rallied 441 points (1.8%) to 25,336, the S&P 500 Index advanced 48 points (1.7%) to 2,787, and the NASDAQ Composite jumped 133 points (1.8%) to 7,561. In moderately heavy volume, 814 million shares were traded on the NYSE and 2.2 billion shares changed hands on the NASDAQ. WTI crude oil advanced $1.92 to $62.04 per barrel and wholesale gasoline gained $0.02 to $1.91 per gallon. Elsewhere, the Bloomberg gold spot price increased $1.19 to $1,323.18 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was nearly 0.1% lower at 90.12. Markets were sharply higher for the week, as the DJIA surged 3.3%, the S&P 500 Index jumped 3.5% and the NASDAQ Composite rallied 4.2%.

Nonfarm payrolls rose by 313,000 jobs month-over-month (m/m) in February, compared to the Bloomberg forecast of a 205,000 increase. The rise of 200,000 seen in January was revised to a gain of 239,000 jobs. The total upward revision to job gains for January and December was 54,000. Excluding government hiring and firing, private sector payrolls increased by 287,000, versus the forecasted gain of 205,000, after rising by 238,000 in January, revised from the 196,000 increase that was initially reported.

The unemployment rate was unchanged at 4.1%, versus estimates calling for a dip to 4.0%, while average hourly earnings were up 0.1% m/m, below projections of a 0.2% gain and versus January’s unrevised 0.3% increase. Y/Y, wage gains were 2.6% higher, south of estimates and January’s downwardly revised 2.8% increase. Finally, average weekly hours ticked higher to 34.5 from January’s upwardly revised 34.4 rate, where it was expected to remain.

Today’s report had a bit of everything to help the stock markets add to weekly gains, with the jump in job growth bolstering a positive economic backdrop and the subdued wage growth tamping down recently resuscitated inflation concerns.

Treasuries were lower after the employment report, with the yield on the 2-year note ticking 1 basis point higher to 2.26% and the yields on the 10-year note and the 30-year bond gaining 4 basis points to 2.89% and 3.16%, respectively.

Bond yields and stocks were higher, while the U.S. dollar is dipped. The markets grappled with recently flared-up Fed rate hike uncertainty, global trade concerns after President Donald Trump enacted his tariff plan yesterday, today’s labor report, and eased geopolitical concerns as President Trump agreed to meet with North Korean leader Kim Jong Un.

Schwab Center for Financial Research – Market Analysis Group

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