S&P 500 futures and Treasury yields gain on Friday as March labor report shows resilient economy

S&P 500 futures and Treasury yields increased on Friday during a holiday-shortened trading session after the March jobs report showed a resilient economy and moderate inflation.

S&P 500 futures gained 0.2%. Futures on the Dow Jones Industrial average gained 55 points. However, Nasdaq-100 futures were flat.

The 2-year Treasury yield jumped 10 basis points to 3.93%. The 10-year Treasury yield added 8 basis points to 3.37%. (One basis point equals 0.01% and yields move inversely to prices.)

The U.S. added 236,000 jobs in March, about in line with expectations, with the unemployment rate falling to 3.5% from 3.6% a month earlier. Expectations were for a 238,000 increase in non-farm payrolls, based on the consensus estimate from Dow Jones economists. Those same economists anticipated the unemployment rate holding steady at 3.6%.

Average hourly earnings increased 4.2% on a 12-month basis, the lowest level since June 2021.

The New York Stock Exchange is closed for Good Friday, so regular trading won’t begin until Monday. Futures and bond trading close early on Friday.

The S&P 500 lost 0.1% for the week ended Thursday, breaking a 3-week win streak as a series of weak labor data points hinted to investors that a recession could be near. The Nasdaq Composite was down 1.1% for the week, while the Dow squeaked out a small gain.

Earlier this week, ADP said private payrolls slowed significantly in March, Labor Department data showed job openings falling to the lowest in nearly two years, and weekly jobless claims came in higher than expected.

Friday’s jobs report runs counter to that weak data and is likely to divide investors. Some may like the resilient economy, while others may not mind a little weakening in the labor market to get the Federal Reserve to back off its ongoing tightening campaign. The Fed’s next decision on interest rates is May 3.

March’s labor report “offered an update on the employment situation that clears the way for the FOMC to hike another quarter-point in May in the event that next week’s CPI release dictates,” wrote Ian Lyngen, head of U.S. rates strategy at BMO Capital Markets.

The consumer price index for March is due on Wednesday.