GLOBAL MARKETS – Wall Street rebounds, bond yields steady ahead of jobs report, Bank Holiday weekend

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Weak US data raise fears of slowdown

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US jobs data on Friday when many markets are on holiday

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Gold & Crude Oil Prices On Track For Weekly Gains

(late trade updates)

By Stephen Culp

NEW YORK, April 6 (Reuters) – US stocks reversed an earlier sell-off and Treasury yields stabilized as investors digested weak jobs data and waited for Friday’s jobs report for signs that the Federal Reserve could pause their rate hikes to try to stave off a recession.

All three major US stock indices rallied and turned green in the early afternoon, with megacap momentum stocks leading the Nasdaq.

Despite this, the Nasdaq remains on course to post three-week winning streaks at the end of the holiday-shortened week.

Economic data released on Thursday indicated that the US jobs market is feeling the effects of the Federal Reserve’s hawkish interest rate hikes as it attempts to cool the economy in a bid to curb inflation.

On Friday, a market holiday, the Labor Department will release its March jobs report and market participants will have the weekend to digest the data ahead of Monday’s opening bell.

“There is some comfort that investors may gain confidence that Friday’s jobs report will show the job market slowing, which would be a move to reduce inflation,” said Joseph Sroka, chief investment officer at NovaPoint in Atlanta.

At last glance, financial markets have priced in a roughly 50/50 chance that the central bank will either leave the Fed’s interest rate on hold at the end of the next monetary policy meeting in May or hike it around 25 basis points, according to CME’s FedWatch tool.

“It’s kind of a 50/50 by investors as to whether there’s going to be a rate hike at the next Fed meeting,” said Tom Hanlin, national investment strategist at US Bank Wealth Management in Minneapolis. “Investors are pricing in rate cuts before the end of the year, but the Fed has said it will keep rates high for as long as needed.

The story goes on

“This gap is causing the volatility in the markets,” Hanlin added.

The Dow Jones Industrial Average was up 20.54 points, or 0.06%, to 33,503.26, the S&P 500 was up 15.89 points, or 0.39%, to 4,106.27 and the Nasdaq Composite was up 99.04 points, or 0.83% to 12,095.90.

European equities moved in the opposite direction as gains in property and travel stocks, along with solid industrial production data from Germany, helped offset worries about a slowdown in the US economy.

The pan-European STOXX 600 index rose 0.51% and MSCI scores for global equities rose 0.19%.

Emerging market equities lost 0.31%. MSCI’s broadest index of Asia-Pacific stocks outside of Japan closed 0.38% lower, while Japan’s Nikkei lost 1.22%.

Treasury yields stabilized, halting recent sharp falls following the jobless claims report.

Benchmark 10-year bonds were last down 3/32 in price to 3.2976%, down from 3.287% late Wednesday.

The 30-year bond was last up 8/32 in price to 3.5447%, down from 3.557% late Wednesday.

The greenback faltered against a basket of world currencies ahead of Friday’s nonfarm payrolls report.

The dollar index fell 0.03%, while the euro rose 0.26% to $1.0931.

The Japanese yen weakened 0.35% against the dollar to 131.78, while sterling was last traded at $1.2451, down 0.05% on the day.

Crude oil prices settled higher, posting a weekly gain on OPEC+ production cuts and a fall in US oil inventories.

US crude edged up 0.11% to $80.70 a barrel and Brent was at $85.12 a barrel, up 0.15% on the day.

Gold dipped and extended its loss as the stock market reversed, but the safe-haven metal was on course for a weekly gain as jitters about the recession mounted.

Spot gold fell 0.6% to $2,009.09 an ounce.

(Reporting by Stephen Culp; Additional reporting by Kevin Buckland in Tokyo and Naomi Rovnick in London; Editing by Jonathan Oatis and Barbara Lewis)