U.S stocks ended mostly higher Friday, with all three major benchmarks scoring a second straight week of gains after investors digested a much stronger-than-expected January jobs report that underlined expectations for an aggressive round of rate increases by the Federal Reserve.
The NASDAQ Composite led the way higher after strong results from Amazon.com Inc. For the week, the Dow gained about 1.1%, the S&P 500 rose 1.6% and the NASDAQ climbed 2.4%. Each index notched a second straight week of gains, according to Dow Jones Market Data. Stock market trade was choppy after the government reported Friday that the U.S economy added 467,000 jobs in January and hiring was much stronger at the end of 2021 than originally estimated.
The unemployment rate ticked up to 4% from 3.9%, while the percentage of people in the labor force ticked up to a pandemic high of 62.2%. The strong January reading served to reinforce expectations the Federal Reserve will be aggressive in lifting interest rates.
Dow Jones Industrial Average
The Dow Jones Industrial Average lost 0.06%. The best performers of the session on the Dow Jones Industrial Average were Salesforce.com Inc., which rose 3.04% or 6.46 points to trade at 219.23 at the close. Meanwhile, JPMorgan Chase & Co added 2.60% or 3.86 points to end at 152.56 and Goldman Sachs Group Inc. was up 2.43% or 8.72 points to 367.60 in late trade. The worst performers of the session were 3M Company, which fell 2.23% or 3.66 points to trade at 160.73 at the close. Walgreens Boots Alliance Inc. declined 1.82% or 0.90 points to end at 48.60 and Procter & Gamble Company was down 1.59% or 2.61 points to 161.53.
NASDAQ 100
The NASDAQ index added 1.58%. The top performers on the NASDAQ Composite were Sphere 3D Corp which rose 31.17% to 3.030, eGain Corporation which was up 26.82% to settle at 12.74, and Iradimed Co which gained 23.66% to close at 48.60. The worst performers were SkyWest Inc. which was down 22.37% to 29.47 in late trade, G Medical Innovations Holdings Ltd which lost 21.80% to settle at 3.30, and Vanda Pharmaceuticals Inc. which was down 17.88% to 12.03 at the close.
Oil
Oil prices bounced around today in see-saw trading, with some investors taking profits after signs of progress in the U.S.-Iran nuclear talks while others kept bullish sentiment bolstered by rising consumption amid ongoing supply constraints. U.S crude fell 33 cents, or 0.4%, to $91.98 a barrel, having dived to as low as $91.35 earlier in the session and risen to as high as $92.73.
Investors scooped up short-term profits on the news suggesting progress in the U.S.-Iran nuclear talks, but fresh buying kicked in again after the technical corrections as global supply is expected to stay tight. U.S. President Joe Biden's administration on Friday restored sanctions waivers to Iran to allow international nuclear cooperation projects, as the talks on the 2015 international nuclear deal enter the final stretch. If the United States lifts sanctions on Iran, the country could boost oil shipments, adding to global supply.
Crude prices, which have already rallied about 20% this year, are likely to surpass $100 per barrel.
Precious and Base Metals
Gold prices hit a more than one-week peak today, as inflationary pressures due to surging oil prices helped cushion the impact of a U.S Treasury yield rally after an upbeat jobs report, while a drop in equities also boosted bullion's appeal. Spot gold rose 0.2% to $1,810.85 per ounce, after hitting its highest since Jan. 27 at $1,814.91 earlier in the session.
U.S gold futures rose 0.2% to $1,811.70. The largest component of inflation currently, beyond the supply chain issues, is oil prices. And this is a problem no matter how high you move interest rates.
Gold is getting a little bit defensive, realizing that we could be in this state for hyperinflation. Oil prices rose on Monday, with Brent crude touching its highest since October 2014. Limiting gold's gains, the dollar firmed, while yields on benchmark 10-year U.S. Treasuries stayed close to their highest levels since December 2019 hit on Friday.
U.S. inflation data for January is due on Thursday and strong data could further fuel Federal Reserve's plan to raise interest rates after the U.S. employment report showed nonfarm payrolls jumped by 467,000 jobs last month. After the U.S. jobs data, the market is pricing in more than five rate hikes at the moment and this week's inflation data will provide further cues on this.
Bullion is considered a hedge against inflation and geopolitical risks, yet rate hikes would raise the opportunity cost of holding non-yielding bullion. Lingering tensions between the West and Russia over Ukraine also supported gold. Elsewhere, silver rose 1.2% to $22.74 per ounce, platinum was steady at $1,023.52, and palladium rose 0.7% to $2,301.19. Copper and aluminum prices rose on Friday, supported by thin inventories, but worries that central bank rate hikes would curb growth and metal demand capped gains. The U.S. economy created far more jobs than expected in January despite the disruption to consumer-facing businesses from a surge in COVID-19 cases, data showed.
Traditional Agricultures
Soybean futures were steady to mostly higher on Friday near an eight-month peak as some traders pocketed profits from strong gains this week, but the market remained underpinned by concerns about weather-reduced yields in South America.
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