US Stocks Hit Record Levels After Weaker Non-Farms – S&P up 0.65%
US equity markets extended their rally on Friday, with stocks closing at or near record levels after US employment data came in slightly below expectations. The Dow gained 0.48% to close at 49,504, while the S&P 500 rose 0.65% to 6,966, and the Nasdaq outperformed with a 0.81% advance to finish at 23,671. Despite the softer headline jobs data, the unemployment rate fell, and shorter-dated US yields pushed higher. The US 2-year Treasury yield climbed 4.4 basis points to 3.532%, while the 10-year yield was little changed, slipping 0.2 basis points to 4.165%. The shift in rate expectations supported the US dollar, with the dollar index rising 0.30% to 99.17. In commodities, oil prices surged again as geopolitical tensions intensified following reports of further unrest in Iran. Brent jumped 2.18% to $63.34 per barrel, while WTI gained 2.35% to $59.12. Gold also attracted strong haven demand, pushing back through the $4,500 level, with the metal rising 0.77% to trade at $4,510.15 by the NY close.
Fed Rate Cuts Still in Play for 2026 After Non-Farms
Rate cuts from the Federal Reserve Bank are still in play this year for the market after the first major data release of 2026 came in close to expectations. Non-Farm Payroll data came in slightly under expectations; however, the Unemployment Rate dropped more than expected, by 0.2% rather than the expected 0.1%, and Average Hourly Earnings did increase by the anticipated 0.2% m/m. The market is now pricing in just a 5% chance of a further rate cut from the Fed at this month’s meeting, but we have seen a bigger change in the March meeting pricing, with the chances of a 25-basis point cut slipping from over 40% a week ago to under 30% now. Traders will now be focussing on key inflation data out of the US this week, and if it remains ‘sticky’, as it has done over the last year, then we can expect those rate cut expectations to pull back further and add more support to the dollar, which has crept up nearly 1% since the start of 2026.
Quiet Calendar Start to Another Busy Trading Week
It is a quiet start to the trading week on the economic calendar, with very little in the form of tier 1 events scheduled; however, geopolitical updates are likely to see more moves in markets as the day progresses. Japan is closed for a bank holiday during the Asian session, which may see a reduction in liquidity. The European session is also set to be relatively quiet in terms of scheduled events. In the US session, there is also little in the way of data scheduled; however, markets will be watching comments from FOMC member Thomas Barkin, who is scheduled to speak later in the day – with his and other Fed members’ comments likely to be under the microscope in the coming days after the big data update on Friday.
Explore all upcoming market events in the Economic Calendar.
