The Stock Market Rises as Treasury Losses Are Triggered by a Surprise Jobs Report

U.S. stock futures continued to climb and Treasury yields edged higher on Friday, following a jobs report that eased fears of an impending economic downturn. The labor market data helped calm Wall Street after a tense period marked by public friction between President Donald Trump and Tesla CEO Elon Musk, which had rattled investor sentiment earlier in the week.

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Futures tied to the S&P 500 gained 0.8%, suggesting a positive open for the benchmark index. Earlier in the session, the market had already begun to recover, spurred by signs that the confrontation between Trump and Musk was softening. The two-year Treasury yield, which is particularly sensitive to Federal Reserve policy expectations, rose seven basis points to 3.99%. Meanwhile, the U.S. dollar also strengthened, gaining 0.2%.

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The latest employment data showed that job growth slowed modestly in May, while revisions to previous months pointed to slightly weaker hiring than previously estimated. Still, the unemployment rate remained unchanged, signaling a relatively steady labor market.

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These figures suggest that employers are approaching hiring cautiously, likely influenced by the Trump administration’s evolving economic policies. As a result, money markets scaled back expectations for two interest rate cuts by the Federal Reserve this year.

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“This data, while mostly in line with expectations, reinforces the view that the labor market remains resilient,” said Florian Roger, head of the Chief Investment Office at BNP Paribas. “Overall, it’s supportive for the market, as it reduces fears of an abrupt slowdown.”

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Equity Markets

Futures for all major U.S. equity indexes were up as of 8:51 a.m. in New York. S&P 500 futures gained 0.8%, Nasdaq 100 futures climbed 0.9%, and contracts on the Dow Jones Industrial Average advanced 0.7%. In Europe, the Stoxx Europe 600 index inched up by 0.1%, while the broader MSCI World Index remained relatively flat, showing little change overall.

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Currencies

The U.S. dollar strengthened on Friday. The Bloomberg Dollar Spot Index, which measures the greenback against a basket of major currencies, rose 0.2%. Meanwhile, the euro slipped 0.4% to $1.1399, the British pound fell 0.3% to $1.3530, and the Japanese yen weakened 0.8% to 144.62 per dollar.

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Cryptocurrencies

Digital assets also rallied, led by Bitcoin and Ether. Bitcoin surged 3.4%, reaching $103,944.76, while Ether matched that gain, rising to $2,480.13. The gains suggest renewed investor interest in crypto, possibly fueled by easing concerns over monetary policy tightening and broader risk appetite returning to markets.

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Bond Markets

In the bond market, U.S. yields moved higher in response to the employment report. The yield on 10-year Treasury notes increased by seven basis points to 4.46%, reflecting investor recalibration of expectations around interest rate cuts. In Europe, the picture was mixed: Germany’s 10-year bond yield dipped by two basis points to 2.57%, while the U.K.’s 10-year gilt yield rose three basis points to 4.65%.

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Commodities

Commodities saw minor moves. West Texas Intermediate crude oil prices rose by 0.3%, settling at $63.55 per barrel. Gold prices were largely unchanged in spot trading, indicating a wait-and-see approach from investors as they assess how economic data and geopolitical headlines might shape future demand for safe-haven assets.

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Overall, the market’s positive reaction to the jobs data reflects a sense of relief that, despite some softening, the labor market remains on solid footing. This has helped temper anxiety over recent political drama and reinforced the view that the Federal Reserve will not need to rush into multiple rate cuts this year.

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As investors look ahead, they’ll be closely monitoring upcoming inflation figures and additional economic reports, which will offer further insight into the Fed’s next moves. For now, the combination of moderate job growth, stable unemployment, and easing tensions in Washington appears to be giving markets a boost.

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