The New York Stock Exchange is seen in New York, Thursday, Feb. 24, 2022. Markets are opening mostly higher on Wall Street Friday after a wild ride a day earlier. The S&P 500 added 0.4% in the early going, following even bigger gains in Europe. Stocks rallied after a shaky start and closed with broad gains Friday as some mixed readings on the U.S. economy stoked hope on Wall Street that inflation may keep cooling and the Federal Reserve may ease up on its interest rate hikes.
Perhaps the clearest action for investors was in the bond market, where the yield on the two-year Treasury dropped to 4.28% from 4.48% just before the release of the data on the U.S. labor market. While weaker raises hurt workers, particularly when they’re still not keeping up with inflation, economists say they could keep the economy out of a vicious cycle where big gains in pay push employers to raise prices for their own products, leading to even higher inflation. It’s something the Federal Reserve has talked about preventing, part of the reason why it’s been hiking interest rates at economy-shaking speed.
That report helped steady the stock market following a shaky morning and sent it ripping higher again. After opening the day with an initial pop of 1.2%, the S&P 500 lost almost all of it within minutes as Wall Street struggled with how to interpret the U.S. jobs report and what it means for the Fed and rates.
Regardless of the size of rate increases the Fed elects to go with at the next couple of policymaking committee meetings, Wall Street is expecting the central bank will hit the pause button on rate hikes after March, said Sam Stovall, chief investment strategist at CFRA. In coming weeks, companies across industries will show how widespread the damage is when they report how much profit they made during the last three months of 2022.
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