Wall Street observed 2.7% weekly gain
Wall Street closed the week with the Dow Jones of Industriales and the S&P 500 entering record territory. It happened after employment data in the US pointed to the slowdown in contracts. Also, the Federal Reserve will maintain its policy.
The Dow Jones accumulated an advance of 2.7%; The S&P 500 rose 1.23%. The Nasdaq index decreased by 1.51%, weighed down by a high-cap technology sector that has not benefited by rising interest rates or economic reopening.
The number of applications for unemployment benefits continued to decline and last week fell below 500,000 for the first time since the start of the coronavirus crisis in March 2020. But on the other hand, the April employment report indicated that job creation is slowing down, and the unemployment rate increased to 6.1%.
The Fed is likely to keep its monetary policy
Wells Fargo economists hope that the recovery in employment will return to its course in the coming months. However, this report underlines that the Fed will still be patient for a while with its accommodative measures, they added.
Fears of rising inflation have continued to set the market pace. Meanwhile, some companies warn that they will have to raise prices due to higher commodities prices.
In the middle of the week, the Secretary of the Treasury of the United States, Janet Yellen, caused a certain uproar with statements. Some interpreted it as the sign of a change in monetary policy.
JJ Kinahan from TD Ameritrade stated that there was a lot of fear that the report results would be so good that it would put extreme pressure on the Fed. Many expected it to be the number that would begin to weigh down the markets because it is inflationary.
In the debt market, the 10-year public bond yield has been declining every day of the week. It reached its minimum peak after the employment data release today and has moved from 1.62% to 1.58%.
On the corporate side, the pharmaceutical and biotech companies that produce vaccines against covid-19 have suffered declines.
