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Wall Street Sees Mixed Close, Treasury Yields Rebound Ahead of Holiday Weekend

U.S. stock indexes exhibited a mixed close, while benchmark Treasury yields recovered following a U.S. jobs report that indicated a rise in unemployment, solidifying the notion that the Federal Reserve will maintain interest rates in its September meeting.

Wall Street sign
Wall Street sign

Mixed Close for Major Indexes

The three major indexes, after giving up earlier gains, lost momentum as the session advanced and investors analyzed the data before the extended U.S. holiday weekend. The S&P 500 and the Dow ended slightly in the green, while the tech-heavy Nasdaq closed almost unchanged. However, all three indexes registered gains for the week. Ryan Detrick, chief market strategist at Carson Group, noted that the solid job numbers brought relief to people heading into the holiday weekend, although there are indications of the economy decelerating, which the Fed desires.

Economy Adds More Jobs Than Expected

The Labor Department's payrolls report revealed that the U.S. economy added more jobs than anticipated last month. However, the increase in unemployment and participation rates, coupled with a welcomed slowdown in average hourly wage growth, reinforced expectations that the Fed will keep key interest rates unchanged this month. Financial markets are currently assigning a 93% probability of such a pause this month, as per CME's FedWatch tool.

European Stocks and Emerging Markets

European stocks stabilized, ending the session flat as a decrease in luxury and auto shares was counterbalanced by gains in mining and healthcare. The STOXX 600 recorded its largest weekly gain since mid-July. Emerging market stocks increased by 0.51%, while MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.25% higher. Japan's Nikkei also increased by 0.28%.

Treasury Yields and the Greenback Advance

U.S. 10-year Treasury yields recovered from earlier losses after the employment report, as investors adjusted positions before the Labor Day weekend. Benchmark 10-year notes and 30-year bonds fell in price, leading to a rise in yields. The U.S. dollar strengthened against the euro and the yen, marking its seventh consecutive weekly gain. The dollar index increased by 0.65%, while the euro and the Japanese yen weakened.

Oil Prices Reach Seven-Month High

Oil prices surged, reaching their highest levels in over seven months, propelled by expectations of tightening supply. U.S. crude climbed 2.3% to settle at $85.55 per barrel, while Brent settled at $88.55 per barrel, up 1.98% for the day. Gold prices fluctuated throughout the session but ended slightly higher, with spot gold increasing by 0.04% to $1,940.36 an ounce.