Stock gains accelerated by midday Friday after an incredible jobs report from Bureau of Labor Statistics.
All three major U.S. indices soared, with the S&P 500 up as much as 3%, before that gain moderated to around 2.8%. In the morning, the index was up 2%. The 10-Year Treasury yield rose to 0.93%, after having sat at around 0.7% earlier in the week.
The economy added 2.5 million jobs in May, as the economy reopened slowly across all states. Economists were expecting a loss of 8 million jobs. April’s report showed a loss of 20 million jobs. Wall Street had hung its hat on a slowing rate of economic decline for the past month or so, as stocks have rallied, but almost no market participant or analyst expected a gain in employment in May. The unemployment rate fell from a bit over 14% to a bit over 13%.
Leading the gains were banks and consumer discretionary. For banks, the expanding yield curve, combined with potentially stronger-than-expected economic demand is powering the group, which had underperformed the market for the first leg of the bounce off of the March 23 low. The Invesco KBW Bank ETF (KBWB) - Get Report rose more than 5%, as did the S&P 500 Equal-Weighted Consumer Discretionary Index.