Closing Stock Market Summary
The stock market closed the week on a positive note. The S&P 500 (+1.1%) and Nasdaq Composite (+1.2%) finished more than 1.0% higher than yesterday and closed near their best levels of the day. The upside moves were supported by a buy-the-dip mentality after a volatile start to the second quarter. The major indices are still lower on the week despite today's performance.
The positive bias was also in response to this morning's release of the March employment report, which reflected ongoing strength in the labor market. The takeaway is that a strong labor market seemingly bodes well for corporate earnings and outlook. On a related note, the earnings reporting period begins next week with big banks like JPMorgan Chase (JPM 197.45, +1.80, +0.8%), Citigroup (C 61.60, +0.69, +1.1%), and Wells Fargo (WFC 57.40, +0.72, +1.3%) reporting results on Friday.
Gains were broad based, but moves in the mega caps and semiconductor stocks had an outsized impact on index performance. The Vanguard Mega Cap Growth ETF (MGK) jumped 1.5% and the PHLX Semiconductor Index (SOX) gained 1.3%. Names like Meta Platforms (META 527.34, +16.42, +3.2%), NVIDIA (NVDA 880.08, +21.03, +2.5%), and Broadcom (AVGO 1339.43, +21.93, +1.7%) logged sizable gains.
All 11 S&P 500 sectors registered gains ranging from 0.2% to 1.6%.
Treasury yields settled higher in response to this morning's data, but that did not deter buying activity in the stock market. The 10-yr note yield jumped another seven basis points today to 4.38% and the 2-yr note yield settled nine basis points higher at 4.73%.
- S&P 500:+9.1% YTD
- Nasdaq Composite: +8.2% YTD
- S&P Midcap 400: +7.5% YTD
- Dow Jones Industrial Average: +3.2% YTD
- Russell 2000: +1.8% YTD
Reviewing today's economic data:
- The headlines from the March employment report were all good economically speaking. Nonfarm payrolls increased by 303,000, the unemployment rate dipped to 3.8%, average hourly earnings were up 0.3%, and the average workweek increased to 34.4 hours.
- The key takeaway from the report is that it continued to support a solid earnings growth outlook even if it didn't necessarily support the outlook for the Fed to cut rates soon.
Looking ahead, there is no US economic data of note on Monday.