US Stocks Rally into Weekend Despite Weak Jobs Data – Nasdaq up 0.8%
US stock markets rallied into the weekend despite a significantly weaker-than-expected non-farm payrolls report. The Dow closed up 0.69%, the S&P gained 0.41%, while the Nasdaq outperformed, closing up 0.80%. Treasury yields saw considerable movement following the data, with the 2-year yield closing down 2.5 basis points at 4.141%, while the benchmark 10-year added 2.5 basis points, ending at 4.309%. The dollar initially dropped sharply on the jobs data but recovered strongly later in the day, with the DXY finishing up 0.36% at 104.24, nearing monthly highs once more. Oil prices continued their upward momentum, with Brent adding 0.4% to reach $73.10 a barrel and WTI rising 0.3% to $69.49. Gold experienced a brief spike on the data release but ultimately fell back in line with dollar strength, closing the NY session at $2,736.28.
Election Concerns Dominate Financial Markets
The US election has undoubtedly become a primary focus for investors in terms of market influence. Friday’s weak jobs data, which would typically be expected to exert a longer-term impact—particularly on US yields and the dollar—had only a brief downward effect before both rebounded, largely due to the inflationary concerns that have been dominating the market in recent weeks. Traders now expect heightened volatility in the coming days, with an underlying trend towards a stronger dollar, particularly if polls suggest a Republican victory. Thursday’s Federal Reserve rate decision and update will be especially interesting, as markets may still be digesting the election result and assessing its potential impact on the US economy.
Calm Before a Major Trading Week
The macroeconomic calendar looks subdued today, marking a brief pause before a week packed with geopolitical developments and central bank updates. Although no significant events are scheduled across the three trading sessions, traders are not anticipating calm market conditions. There have already been sharp moves in FX markets since the 5 a.m. open, with expectations of continued high volatility as updates from the US election race hit newswires, especially with polling day just around the corner.
