Stocks Surge, Bond Yields Retreat Amidst Mixed Jobs Data

Stocks experienced an upswing, while bond yields declined in response to a mixed jobs report, which had limited impact on the Federal Reserve’s policy outlook, Wall Street observed a reversal of recent trends.

The labor-market data presented a mixed picture, offering both positive and negative indicators for investors. Payrolls grew at a slower pace than expected, but wage growth surpassed forecasts. With around 47 days until the next Federal Reserve decision, the market seemed to indicate that the central bank might be nearing the end of its hiking cycle.

Following the release of the data, stocks faced some initial instability before a more bullish sentiment took hold, leading the S&P 500 to end its three-day decline. Notably, two major benchmark companies had contrasting outcomes—Amazon.com Inc. witnessed a surge of over 10% due to an optimistic revenue forecast, while Apple Inc.’s stock dipped below its historic $3 trillion valuation after a disappointing outlook.

Furthermore, the bond market underwent some correction, causing unease among global investors. Treasury yields decreased across the curve, with 10-year yields reaching their lowest level since November. Additionally, the US dollar weakened against its peers in developed markets.

The Bureau of Labor Statistics reported that nonfarm payrolls increased by 187,000 in the last month, mirroring the growth in June. The unemployment rate also declined to 3.5%. Moreover, average hourly earnings rose by 0.4% from June and 4.4% from the previous year, both exceeding expectations.

Federal Reserve officials Raphael Bostic and Austan Goolsbee interpreted the slower US employment gains as an indication that the labor market is reaching a better balance, suggesting that the central bank might need to consider how long to maintain elevated interest rates.

Several companies experienced notable movements in their stock prices. Nikola Corp. (NKLA) saw a decline after appointing a new CEO, replacing the current one who had only been in the position for less than a year. Tupperware Brands Corp.(TUP), on the other hand, surged following an agreement with its lenders to restructure debt as part of its ongoing turnaround efforts. DraftKings Inc. (DKNG) also rose due to better-than-expected second-quarter sales and an improved forecast for the year. Icahn Enterprises LP (IEP), however, faced a drop after its founder, Carl Icahn, reduced the company’s