Treasuries Sink And Stocks Rise On Solid Jobs Data: Markets Wrap
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Treasuries fell and the dollar rose as stronger-than-forecast employment growth soothed concern the US economy is poised to slow, stanching speculation the Federal Reserve will need to cut interest rates any time soon. Stocks hit fresh all-time highs.
Short-dated bonds underperformed, with two-year yields up eight basis points to 3.87%. Money markets showed traders saw almost zero chance for a Fed reduction in July, compared with the roughly 25% probability seen before the report. The chance of a move in September was reduced to about 75%. The S&P 500 rose for the fifth time in six days.
US job growth exceeded expectations in June for a fourth straight month and the unemployment rate fell, showcasing a labor market that is holding up. Payrolls increased 147,000 last month. The unemployment rate fell to 4.1%.
“The labor market remains on solid footing,” said Sameer Samana at Wells Fargo Investment Institute. “The data will reinforce the Fed’s wait-and-see approach and we would not expect a cut in July.”
Fed Chair Jerome Powell has said there is no rush to reduce borrowing costs until there is more clarity about the impact of tariffs on inflation. Price pressures have been subdued so far this year.
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