Thursday's sharp reversal lower for stocks was old news Friday with the main indexes soaring after the March jobs report. The volatility could continue next week, too, with several key events on the horizon.
It's a little confusing as to why stocks rallied today considering this morning's data from the Bureau of Labor Statistics showed the U.S. added 303,000 new jobs in March – well above economists' expectations for 200,000. Additionally, the unemployment rate edged down to 3.8% from 3.9%.
One positive data point helping support calls for the Fed to start cutting interest rates was that average hourly earnings – a measure of inflation – rose at their slowest annual rate since June 2021. Still, the 0.3% month-over-month rise in wages was quicker than the 0.1% increase seen in February.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
What's more, yields on both the 2-year and 10-year Treasury yields spiked to the high end of their year-to-date ranges as expectations for a June rate cut dropped (to a 51% chance vs yesterday's 59%, according to CME Group's FedWatch Tool).
Putting all these pieces together would make one assume stocks would extend Thursday's late-day selloff. Yet, at Friday's close, the Dow Jones Industrial Average was up 0.8% at 38,904, the S&P 500 was 1.1% higher at 5,204, and the Nasdaq Composite had jumped 1.2% to 16,248.
"This morning's blowout jobs numbers show that the economy isn't showing any signs of slowing down and consumer spending should be able to hold up in the near term," says Chris Zaccarelli, chief investment officer for Independent Advisor Alliance. While this could be bad for the bond market, stocks can continue to move higher if investors place more importance on strong consumer spending and corporate profits than on the Fed's rate-cut plans, he adds.
Snowflake upgraded to Buy
In single-stock news, Snowflake (SNOW) rose 1.7% after Rosenblatt Securities analyst Blair Abernethy upgraded the tech stock to Buy from Neutral (the equivalent of Hold). The analyst says solid IT spending, accelerating digital transformation trends and a "strong first-quarter performance from the leading cloud service providers" have Snowflake in a position to beat Q1 product revenue growth estimates.
Shares of SNOW – which happens to be a member of the Berkshire Hathaway equity portfolio – have been spiraling since late February when the company announced the departure of its CEO. Analysts remain bullish, though, as evidenced by a consensus Buy recommendation, according to S&P Global Market Intelligence.
Tesla drops on low-cost car reports
Tesla (TSLA), meanwhile, fell 3.6% after a Reuters report suggested the electric vehicle maker is scrapping plans for a low-cost car.
The company has yet to formally comment on the speculation, although in a post on X, his social media platform, Tesla CEO Elon Musk wrote "Reuters is lying (again)."
CPI and earnings season on deck
Looking ahead, there are a few things investors will be paying close attention to next week. One is oil prices. Crude futures are up nearly 22% for the year to date, which "threatens the 'inflation is falling' narrative and has driven expectations higher," says Liz Young, head of investment strategy at SoFi.
Inflation will be front and center on next week's economic calendar, with the March Consumer Price Index (CPI) set for release Wednesday morning.
And finally there's earnings season. While next week's earnings calendar is relatively light, Friday's results from several big banks, including JPMorgan Chase (JPM), mark the start of the first-quarter reporting season.
Related content
- Bank of America Gets Downgraded Ahead of Earnings
- TIPS vs I-Bonds
- How Interest Rates Impact Stock Prices
-
How Another Trump Presidency Will Impact the Stock Market in 2025President Trump will have little direct impact on the stock market, but his policies, initiatives and posts certainly can make prices move. Here's how.
-
Stock Market Today: Stocks Are Mixed Ahead of CPICool wholesale inflation numbers provide only slight relief before Wednesday's release of December Consumer Price Index data.
-
How Another Trump Presidency Will Impact the Stock Market in 2025
President Trump will have little direct impact on the stock market, but his policies, initiatives and posts certainly can make prices move. Here's how.
-
Stock Market Today: Stocks Are Mixed Ahead of CPI
Cool wholesale inflation numbers provide only slight relief before Wednesday's release of December Consumer Price Index data.
-
Irrevocable Trusts: So Many Options to Lower Taxes and Protect AssetsIrrevocable trusts offer nearly endless possibilities for high-net-worth individuals to reduce their estate taxes and protect their assets.
-
Stock Market Today: Dow Leads as UnitedHealth Stock PopsUnitedHealth was the best Dow Jones stock Monday on reports that Medicare Advantage payments could rise in 2026.
-
How to Organize Your Financial Life (and Paperwork)To simplify the future for yourself and your heirs, put a financial contingency plan in place. The peace of mind you'll get is well worth the effort.
-
Financial Confidence? It's Just Good Planning, Boomers SayBaby Boomers may have hit the jackpot money-wise, but many attribute their wealth to financial planning and professional advice rather than good timing.
-
Will You Be Able to Afford Your Dream Retirement?You might need to save more than you think you do. Here are some expenses that might be larger than you expect, along with ways to ensure you save enough.
-
Three Steps to Simplify Paying Your Taxes in RetirementOnce you retire, how you pay some of your taxes can change. Here's how to get a handle on them so you don't run afoul of the IRS and face penalties.
