S&P/TSX composite up Friday, U.S. stock markets rally after jobs report shows cooling

TORONTO — Canada’s main stock index rose Friday, led by strength in base metals, utilities and telecom, while U.S. markets rallied after the latest jobs report came in cooler than expected.

Markets rose Friday after the latest report on the U.S. jobs market, which fell quite short of expectations, said Andrew Buntain, vice-president and portfolio manager at Fiduciary Trust Canada.

“Financial markets have responded robustly in North America, certainly, with equity markets and bond yields falling,” said Buntain.

The labour market added 175,000 jobs in April, down sharply from March and well below the 233,000 gain expected by economists. The unemployment rate also ticked higher to 3.9 per cent, and average hourly earnings rose less than expected. 

For market watchers hoping for interest rate cuts, bad economic news is good news, said Buntain, as the central bank has been holding off on cutting due to continued economic resilience. 

“The jobs report has caused a lot of excitement today in the market. Whether or not that lasts will remain to be seen, but definitely was cheered broadly by the overall market.”

In New York, the Dow Jones industrial average was up 450.02 points at 38,675.68. The S&P 500 index was up 63.59 points at 5,127.79, while the Nasdaq composite was up 315.37 points at 16,156.33.

The S&P/TSX composite index closed up 124.19 points at 21,947.41.

Friday’s report puts an interest rate cut back on the table from the U.S. Federal Reserve for September, said Buntain.

“This is a very pleasing report to the Fed, in that it’s not too cold, not too hot,” he said. “And I think the market is in agreement.”

The gains were led by the Nasdaq, which jumped just shy of two per cent. Shares in Apple were up almost six per cent after the company announced a significant stock buyback. Microsoft rose 2.2 per cent while Nvidia was up 3.5 per cent. 

In Canada, meanwhile, a June cut is looking increasingly likely, said Buntain, as the Canadian economy is much more sensitive to interest rates. 

“We still have a very significant sensitivity to mortgage interest cost being the biggest portion of our CPI,” he said.

The Canadian dollar traded for 73.14 cents UScompared with 73.00 cents US on Thursday.

The June crude oil contract was down 84 cents at US$78.11 per barrel and the June natural gas contract was up 10 cents at US$2.14 per 1,000 cubic feet.

The June gold contract was down US$1.00 at US$2,308.60 an ounce and the July copper contract was up eight cents at US$4.56 a pound.

— With files from The Associated Press

This report by The Canadian Press was first published May 3, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD) 

Rosa Saba, The Canadian Press