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S&P/TSX Composite Friday, U.S. stock markets rise after jobs report shows cooling

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

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

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

“The financial markets have reacted strongly, especially in North America, with equity markets and bond yields falling,” Buntain said.

The labor market added 175,000 jobs in April, a sharp decline from March and well below the 233,000 increase expected by economists. The unemployment rate also rose to 3.9 percent, and the average hourly wage rose less than expected.

For market watchers hoping for rate cuts, bad economic news is good news, Buntain said, as the central bank has postponed its rate cuts due to continued economic resilience.

“The jobs report created a lot of excitement in the market today. Whether this remains the case remains to be seen, but has certainly been widely welcomed by the general market.”

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

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

Friday’s report puts a rate cut on the table for September from the US Federal Reserve, Buntain said.

“This is a very gratifying report for the Fed because it is not too cold and not too hot,” he said. “And I think the market agrees.”

The gains were led by the Nasdaq, which rose just under two percent. Apple shares rose nearly six percent after the company announced a significant share buyback. Microsoft rose 2.2 percent, while Nvidia rose 3.5 percent.

In Canada, a rate cut in June appears increasingly likely, Buntain said, because the Canadian economy is much more sensitive to interest rates.

“We are still very sensitive to the fact that mortgage interest costs make up the majority of our CPI,” he said.

The Canadian dollar traded for 73.14 cents in the US, compared with 73.00 cents in the US on Thursday.

The June crude oil contract fell 84 cents to $78.11 per barrel and the June natural gas contract rose 10 cents to $2.14 per 1,000 cubic feet.

The June gold contract fell US$1.00 to US$2,308.60 per ounce and the July copper contract rose eight cents to US$4.56 per 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