Wall Street has surged to close at its highest level in two weeks after a strong jobs report and assurances from US Federal Reserve chairman Jerome Powell that the central bank would be patient and flexible in steering the course of interest rates.
Based on the latest available data, the Dow Jones Industrial Average rose 746.94 points, or 3.29 per cent, to 23,433.16, the S&P 500 gained 84.05 points, or 3.43 per cent, to 2531.94 and the Nasdaq Composite added 275.35 points, or 4.26 per cent, to 6738.86.
Technology stocks led the charge, jumping 4.3 per cent, bouncing back from the prior session’s worst day for the sector in over seven years. The Labor Department’s employment report showed the US economy added 312,000 new jobs in December, far more than the 177,000 analysts expected. Powell, in remarks to the American Economic Association, soothed market nerves with assurances that the central bank is sensitive to risks that worry investors and is not on a preset path of interest rate hikes.
News that China and the US would hold trade talks in Beijing next week helped tariff-vulnerable industrials lead the Dow’s rally, headed by Caterpillar, United Technologies, 3M and Boeing.
Brent crude futures rose $US1.11 to settle at $US57.06 a barrel, a 1.98 per cent gain. US crude futures settled 87 cents higher at $US47.96 a barrel, a 1.85 per cent gain.
Safe-haven assets retreated. Treasury yields rose sharply, and the dollar gained 0.8 per cent against the yen. Spot gold prices, which reached a six-month peak on Thursday, dropped 0.7 per cent. Powell’s dovish comments pushed down the US dollar index, which gave up earlier gains and last traded down 0.1 per cent. The euro was little changed.
Morning-Market-Note-Monday-7th-January