Thus, the S&P 500 and Dow Jones recorded new intraday historical highs at the opening of the trading session. Around 11:20 am, the S&P 500 gained 1.16%, at 4,066.37 points. The Dow Jones increased 1%, adding 33,488.87 points. The Nasdaq had an appreciation of 1.14%, to 13,633.61 points.
Today’s session is the first opportunity for the American stock market to react to the employment report, which was released last Friday. The data indicates that the American private sector generated 916,000 new jobs in March, recording the best result since August 2020 and almost double the 468,000 jobs created in February.
“The increase is expected to continue in the following months, with pandemic restrictions easing and the $ 1.9 trillion stimulus package kicking in. That said, employment data will remain well below the pre-pandemic level for a while, even with the monthly readings up, “says TD Securities’ interest rate, exchange and commodities team.
However, the prospect of a strong economic recovery, driven by the stimulus package, as well as the $ 2.3 trillion infrastructure program from the Biden government, and the continuation of vaccination has fueled fears that the economy may overheat and compel the Federal Reserve (Fed, American central bank) to raise interest rates before the initial projections for 2023 or 2024.
“Growth prospects, the risk of inflation and the pace of vaccinations remain the dominant factors driving the financial markets,” wrote Hussein Sayed, chief market strategist at FXTM, in a daily note.
“Investors appear to be ahead of the Fed foreseeing an increase of at least 25 basis points in rates by the end of next year. If parts of Biden’s infrastructure proposal come to fruition in the coming months, we are likely to see more policymakers showing signs that they can restrict monetary policy, ”said Sayed.
Treasury yields, which have been closely monitored by stock market participants, are also operating at a slight increase today. T-note’s 10-year interest rate rose to 1.729%, from 1.720% from the previous close.
In macroeconomic news, the IHS Markit institute’s US service sector purchasing managers’ index (PMI) rose to 60.4 points in March, from 59.8 points in February.
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