Wall Street chugs higher on jobs data, trade optimism

© Reuters. FILE PHOTO: Traders work on the floor at the NYSE in New York

By Sruthi Shankar and Shreyashi Sanyal

(Reuters) – Wall Street’s main indexes rose on Friday after data showed U.S. employment growth was better-than-expected in March, easing concerns of a domestic slowdown, while hopes of a U.S.-China trade deal boosted sentiment.

The Labor Department report showed nonfarm payrolls accelerated from a 17-month low and topped economists’ estimates, as milder weather boosted hiring in sectors like construction.

Average hourly earnings rose 0.1% in March, after jumping 0.4% percent in the previous month, while the unemployment rate held steady at 3.8%.

The report adds to fairly upbeat construction spending and factory numbers that led Wall Street banks to boost their growth estimates for the first quarter.

“I think the market loves it. Just last week we were looking at an inverted yield curve and potential recession fears,” said Sandy Villere, portfolio manager of the Villere Balanced Fund.

The Federal Reserve last month suspended its three-year campaign to tighten monetary policy, increasing market expectations of an interest rate cut in early 2020.

However, the latest job numbers gave traders little reason to reprice those expectations which had gained traction when the U.S. Treasury yield curve briefly inverted in late March, reviving recession fears.

Bank stocks, which tend to benefit from a rising interest-rate environment, dipped 0.1%.

The markets were also helped by President Donald Trump’s comments on Thursday that the U.S. and China were close to a trade deal that could be announced within four weeks. Although Trump later said he would not predict that a deal will be reached.

Trade hopes and a dovish Fed have helped push the to its highest since Oct. 9, putting the index 1.7% away from an all-time high of 2,940.91 points.

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