Wall Street’s major market averages pushed up on Monday, with the benchmark indices extending its gains from Friday, as hopes for rate cuts were reignited following a softer-than-expected jobs report last week.
The tech focused Nasdaq (COMP:IND) was up 0.9%, while the S&P 500 (SP500) gained 0.8%, and the blue-chip Dow (DJI) inched up by 0.4%.
From a sector point of view, nine of the 11 S&P segments are higher, with Info Tech and Energy at the top of the leaderboard. At the same time, the worst performing sector on the session is Real Estate.
Looking towards the Treasury market and yields have noticed a slight downward shift. The shorter end U.S. 2 Year Treasury yield (US2Y) declined by 1 basis point to 4.81%. At the same time, the longer end U.S. 10 Year Treasury yield (US10Y) moved lower by 2 basis points to 4.48%.
See how other yields trade across the entire yield curve here.
“The latter half of last week saw strong gains for most asset classes thanks to an FOMC meeting that avoided hawkish surprises coupled with a softer payrolls report on Friday that reignited hopes of a soft landing for the US economy,” said Deutsche Bank’s Peter Sidorov.
“A single, dubious quality U.S. data report last Friday was enough to send bond and equity markets into paroxysms of delight. One month’s employment report should not trigger market moves of this degree,” said UBS’ Paul Donovan,
“It is easy to put all the blame for this on the exuberance of traders, but Federal Reserve Chair Powell’s mantra of “data dependency” means investors will naturally elevate imprecise short-term data releases into the arbiters of U.S. monetary policy,” Donovan added.
“The softening adds credibility to the leading indicators—many of which were cited by Chair Powell last week—which point to an extended run of weakening payroll prints,” said Pantheon Macroeconomics.
On the economic front, Richmond Fed President Thomas Barkin and New York Fed president John Williams both spoke.